Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next

Exercise 5-8 Compute the Margin of Safety [LO7]

Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next month’s budget appear below:

Selling price	$25	per unit
Variable expenses	$15	per unit
Fixed expenses	$8,500	per month
Unit sales	1,000	units per month

Required:
1.	Compute the company’s margin of safety. (Omit the "$" sign in your response.)

Margin of safety

$ 3,750

2.	Compute the company’s margin of safety as a percentage of its sales. (Omit the "%" sign in your response.)

Margin of safety

15  %