Question

Citrus Fruits sells oranges for $20 per crate. If the company's margin of safety is $180,000, the margin of safety in units is [blank]
crates. (Enter your answer as a whole number.)

Answer 1

To calculate the margin of safety in units (which is the number of crates), you can use the formula:

\[
\text{Margin of Safety in Units} = \frac{\text{Margin of Safety in Dollars}}{\text{Selling Price per Unit}}
\]

In this case:

- Margin of Safety in Dollars = $180,000
- Selling Price per Crate (Unit Price) = $20

Now plug the values into the formula:

\[
\text{Margin of Safety in Units} = \frac{180,000}{20} = 9,000
\]

So, the margin of safety in units is **9000 crates**.