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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
    E 33.5% Correct Answer Incorrect Answer

    Solution

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

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