Globus Autos sells a single product. 8,300 units were sold resulting in $84,000 of sales revenue, $24,000 of variable costs, and $18,000 of fixed costs. If Globus reduces the selling price by $1.10 per unit, the new margin of safety is: (Round any intermedary calculations to the nearest cent.) A. 2,872 units B. 8,300 units C. 5,364 units D. 5,428 units

Margin of safety= 5,364 units

Explanation:

First, we need to calculate the break-even point in units:

Selling price= 84,000/8,300= $10.12

Unitary variable cost= $2.89

New selling price= 10.12 - 1.1= $9.02

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 18,000 / (9.02 - 2.89)

Break-even point in units= 2,936 units

Now, the margin of safety:

Margin of safety= (current sales level - break-even point)

Margin of safety= 8,300 - 2,936

Margin of safety= 5,364 units

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).

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