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Can anyone please solve this question?

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Can anyone please solve this question?

An organisation manufactures a single product which is sold for $80 per unit. The organisation’s total monthly fixedcosts are $99,000 and it has a contribution to sales ratio of 45%. This month it plans to manufacture and sell 4,000units.
What is the organisation’s margin of safety this month (in units)?
A
1,250
B
1,750
C
2,250
D
2,750

April 10th 2015 AN ACCA USER 2,300 Points

1 Reply

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Contribution to sales ratio = 45/100*80 = 36

Break even points in Units = Fixed cost / contribution to s.r = 99000/36 =2750

Margin of safety in units = Budgeted sales in Units - Break even points in units

                                     = 4000-2750
                                      = 1250 units

therefore correct answer is A.1250

May 4th 2015 AN ACCA USER 140 Points
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