Calculate margin of safety reported by pure water products

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Reference no: EM131221352

Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below:

? the unit that attaches to the faucet is sold for $80 and has variable costs of $20

? the pitcher-filter sells for $90 and has variable costs of $25

? fixed costs total $775,000

? Pure Water sells 3 faucet models for every 2 pitcher-filters sold Assume that last year, the company sold 12,000 faucet model units and 8,000 pitcher-filter units.

Calculate the margin of safety reported by Pure Water Products last year. Do not use decimals in your answer.

Reference no: EM131221352

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