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12. Ensley Corporation has provided the following data concerning its only product:

The margin of safety as a percentage of sales is closest to:

  • a.

    61%

  • B.

    28%

  • c.

    72%

  • d.

    39%

Margin of safety in dollars: Break-even sales = $200 per unit × 21,816 = $4,363,200 Current sales = $200 per unit × 30,300 = $6,060,000 Margin of safety in dollars = Sales - Break-even sales = $6,060,000 - $4,363,200 = $1,696,800 Margin of safety as a percentage of sales = Margin of safety in dollars $6,060,000 = 28% (rounded)

Current sales = $1,696,800

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