If Coors Company expects sales of $340,000 (4,000 units at $85 per unit). The company's total fixed costs are $175,000 and its variable costs are $35 per unit. a) The break-even in units is 3500 units and (b) the margin of safety in dollars is $42,500.
a. Break-even in units
Break-even in units = Total Fixed costs ÷ Contribution margin per unit;
Break-even in units = $175,000 / $85 per unit - $35 per unit
Break-even in units = $175,000 / $50 per unit
Break-even in units = 3500 units
b. Margin of safety
Margin of safety = Selling price - ( Break-even in units × selling price per units)
Margin of safety =$340,000 − (3,500 × $85)
Margin of safety =$340,000 −$297,500
Margin of safety = $42,500
Therefore the break-even in units is 3500 units and the margin of safety is $42,500.
Learn more about Break-even in units here:https://brainly.com/question/15281855
#SPJ1
