In: Accounting
Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below:
| Selling price per unit | $ | 30 |
| Variable expense per unit | $ | 20 |
| Fixed expense per month | $ | 7,500 |
| Unit sales per month | 1,000 | |
Required:
1. What is the company’s margin of safety?
2. What is the company’s margin of safety as a percentage of its sales?