Mcmurtry Corporation sells a product for $110 per unit. The product's current sales are 12,200 units and its break-even sales are 10,614 units. The margin of safety as a percentage of sales is closest to:

a. 13%
b. 15%
c. 87%
d. 85%?

The correct answer is A.

Explanation:

Giving the following information:

Mcmurtry Corporation sells a product for $110 per unit. The product's current sales are 12,200 units and its break-even sales are 10,614 units.

The margin of safety is the number of units or amount of dollars that provide genuine profit to the company. It is the "margin" that gives room to try new strategies.

It is calculated using the following formula:

Margin of safety ratio= (current sales level - break-even point)/current sales level

Margin of safety ratio=  (12,200 - 10,614) / 12,200

Margin of safety ratio= 0.13=13%

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

                                          hope it

answer; customers within the organization