Vintage Weaponry is owned and operated by a craftsman who makes replicas of historic firearms for museums, sportsmen, and collectors. He is currently producing 40 flintlock muskets per month. Data are as follows: Sales price per unit $ 900 Variable cost per unit 700 Fixed costs per month 4 comma 800 If Vintage expects to sell 60 units per month, how much is his margin of safety expressed in sales revenue?

Margin of safety= $32,181.82

Explanation:

Giving the following information:

Sales price per unit $900

Variable cost per unit $700

Fixed costs per month $4,800

Vintage expects to sell 60 units per month

First, we need to calculate the break-even point in dollars:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 4,800 / [(900 - 700) / 900]

Break-even point (dollars)= 4,800/0.22

Break-even point (dollars)=$21,818.18

Now, we can calculate the margin of safety in dollars:

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

Margin of safety= (60*900) - 21,818.18

Margin of safety= 54,000 - 21,818.18

Margin of safety= $32,181.82

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the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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