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.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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