Margin of safety in revenue equals MOS in units multiplied by the selling price per unit. If MOS in units is 2,000 and the selling price per unit is 25, what is MOS in revenue?

• A. 50,000
• B. 2,000
• C. 12,500
• D. 30,000

Answer: (A)

The margin of safety in revenue shows how much revenue can fall before hitting the break-even point, so you convert the margin of safety in units into revenue by multiplying by the selling price per unit. Here, 2,000 units × 25 per unit equals 50,000, so the margin of safety in revenue is 50,000. This matches the option of 50,000. The other numbers would represent either the margin of safety in units or amounts that don’t reflect multiplication by the selling price.