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What would the company margin of safety in dollars be

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Reference no: EM132581108

A company's contribution format income statement for last month is given below:

Sales (42,000 units × $21 per unit )$882,000

Variable expenses 617,400

Contribution margin 264,600

Fixed expenses 211,680

Net operating income$52,920

Question 1: The company considers renovating its operations by purchasing a new machine that would reduce variable expenses by $6.30 per unit. However, fixed expenses would increase to a total of $476,280 each month. Using the new machine would not cause a change in monthly sales quantity or price per unit. What would the company's margin of safety in dollars be if it purchases and uses the new machine?

Reference no: EM132581108

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