Reference no: EM132528667
Selling price per unit (package of 2 CDs)......................................$24.00
Variable costs per unit:
Direct material...............................................................................................................$5.50
Direct labor......................................................................................................................$4.50
Artist's royalties..............................................................................................................$4.00
Manufacturing overhead..........................................................................................$3.00
Selling expenses............................................................................................................$1.10
Total variable costs per unit............................................................$18.10
Annual fixed costs:
Manufacturing overhead..........................................................................................$186,000
Selling and administrative.......................................................................................$260,000
Total fixed costs................................................................................$446,000
Forecasted annual sales volume (120,000 units).........................$2,880,000
Question 1: What is the firm's margin of safety?
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