Margin of Safety Head-First Company plans to sell 4,940 bicycle helmets at $68 each in...
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Accounting
Margin of Safety
Head-First Company plans to sell 4,940 bicycle helmets at $68 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 2,152.
Required:
1. Calculate the margin of safety in terms of the number of units. units
2. Calculate the margin of safety in terms of sales revenue. $
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