Accounting Question: Computing margin of Safety Ratio Smith Company produces desk lamps. The information for June indicated that the selling price was $\$25$ per unit, variable costs were $\$15$ per unit, fixed costs ...--prophetes.ai

Accounting Question: Computing margin of Safety Ratio Smith Company produces desk lamps. The information for June indicated that the selling price was $\$25$ per unit, variable costs were $\$15$ per unit, fixed costs totaled $\$6,000$, and the margin of safety in dollars was $\$12,500$. Smith currently sells 1,100 lamps and earns $\$5,000$ of profit. How much is Smith’s margin of safety ratio? A.) 45.5% B.) 2.5% C.) 2.2% D.) 40.0% 1. _To compute Margin of Safety Ratio you take (Margin of Safety in Dollars/Actual (expected) Sales)_

Hint: If they expect to sell 1,100 at $25 each, what are the expected sales? You already have the margin of safety, so it is just division from there.