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Compute the margin of safety in units and dollars

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Reference no: EM131920692

Problem

Munoz Company makes and sells products with variable costs of $51 each. Munoz incurs annual fixed costs of $32,400. The current sales price is $69.

Assume that Munoz concludes that it can sell 1,850 units of product for $65 each. Recall that variable costs are $49 each and fixed costs are $22,600. Compute the margin of safety in units and dollars and as a percentage.

Reference no: EM131920692

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