Margin of safety

Question 1

CM per unit

Answer 1

(SP per unit) - (VC per unit)

Question 2

Break even in units

Answer 2

(Fixed costs) / (CM per unit)

Question 3

Desired profit

Answer 3

(FC + Desired profit) / (CM per unit)

Question 4

Margin of safety in units

Answer 4

(required sales to achieve desired profit) - (break even in units)

Question 5

Margin of safety in $

Answer 5

(Budgeted sales) - (BE sales)

Question 6

Budgeted sales

Answer 6

(SP per unit) (sales to achieve desired profit)
or
(units) (selling price)

Question 7

Margin of safety ratio

Answer 7

(budgeted sales) - (BE sales) / (budgeted sales