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ABC Inc. manufactures and sells toys. Price and cost data are as follows: Selling price per unit (package of 2 CDs)...................................... $27.00 Variable costs per unit: Direct material............................................................................................................... $6.00 Direct labor...................................................................................................................... $6.00 Artist's royalties.............................................................................................................. $4.50 Manufacturing overhead.......................................................................................... $4.00 Selling expenses............................................................................................................ $1.00 Total variable costs per unit............................................................ $21.50 Annual fixed costs: Manufacturing overhead.......................................................................................... $190,000 Selling and administrative....................................................................................... $300,000 Total fixed costs................................................................................ $490,000 Forecasted annual sales volume (120,000 units)......................... $3,240,000 What is the firm's margin of safety? Select one: a. 836,364 b. 750,000 c. 834,545 d. 738,400

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