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    Question

    If Selling Price is 9 per unit, variable cost is 5 per

    unit and fixed cost is 100000, what is the Margin of safety in % if the budgeted units are 1,00,000.
    A 75% Correct Answer Incorrect Answer
    B 50% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 63.5% Correct Answer Incorrect Answer

    Solution

    BE Qty = Fixed Cost/ Contribution per unit = 100000/4 = 25000 units and MOS = 100000 – 25000 = 75000 units. MOS % = 75000/100000 = 75%

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