The margin of safety in dollars is $1,375,475.
To calculate earnings margin dollars begin with your gross earnings. which are the distinction between sales and COGS. Then, discover the proportion of the revenue this is the gross profit. To locate this, divide your gross income by means of revenue. Multiply the entire with the aid of a hundred and voila you have got your margin percent.
The calculation is shown below:
The margin of safety in dollars = (Current sales - Break-even sales) * Selling price
Margin of safety in dollars = (42,100 units - 34,665 units) * $185
Margin of safety in dollars = 7,435 units * $185
Margin of safety in dollars = $1,375,475
Hence, the margin of safety in dollars is 1,375,475.
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