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What is the margin of safety for the product

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Reference no: EM132968605

Problem - A firm has the following information available for two products:

 

A

B

Sales

$120,000

$130,000

Variable CGS

$30,000

$50,000

Fixed CGS

$25,000

$20,000

Gross Margin

$65,000

$60,000

Variable SG&A

$15,000

$20,000

Fixed SG&A

$20,000

$10,000

Net income

$30,000

$30,000

Required - What is the margin of safety for the product with the greater likelihood to incur loss?

Product A: $75,000

Product B: $65,000

Product A: $48,000

Product B $60,000

Reference no: EM132968605

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