Answer:
$1, 161,875
Explanation:
The margin of safety is the difference between the expected profits and the break-even point. It can be expressed either in units or dollars. Obtaining the margin of safety is therefore expected profit- break-even point.
For Morganti Corporation,
Sales =40,900 units
Break-even sales = 31,605 units
Margins of safety units = 40,900 - 31605 = 9,295 units
Margin of safety in dollars = 9295 x selling price
= $9295 x $125
= $1, 161,875
