Flannigan company manufactures and sells a single product that sells for $450 per unit; variable costs are $300. annual fixed costs are $870,000. current sales volume is $4,200,000. compute the current margin of safety in dollars for flannigan company.

$2,612,612.

$1,587,388.

$2,460,000.

$1,560,000.

$2,895,652.

$1,590,000

Explanation:

The computation of the current margin of safety in dollars is shown below:

Margin of safety = Expected sales - break even sales

where,  

Expected sales = (fixed expense) ÷ (contribution margin ratio)

= ($870,000) ÷ (33.33%)  

= $2,610,000

The contribution margin ratio equals to

= (Contribution margin per unit) ÷ (selling price per unit) × 100

where,  

Contribution margin per unit = Selling price per unit - Variable expense per unit  

= $450 - $300

= $150

So, the Profit volume ratio = ($150) ÷ ($450) × 100 = 33.33%

So, the margin of safety would be

= $4,200,000 - $2,610,000

= $1,590,000

This is the answer and same is not provided in the given options

the answer is     d. in our global economy, most job growth will be in services, but manufacturing jobs will exist, too.