The manager at Tom's Taxidermy expects to sell 800 units at $30 each unit. In order for the manager to breakeven, the manager must sell 400 units. What is the margin of safety in dollars?
A) $12,000
B) $14,000
C) $16,000
D) $24,000
A
Explanation: A)
800 units × $30 = $24,000
400 units × $30 = 12,000
Margin of safety in dollars: $24,000 - $12,000 = $12,000 margin of safety
Business
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