EX 21-24 Break-even and margin of safety relationships

At a recent staff meeting, the management of Boost Technologies Inc. was considering discontinuing the Rocket Man line of electronic games from the product line. The chief financial analyst reported the following current monthly data for the Rocket Man:



Units of sales 420,000
Break-even units 472,500
Margin of safety in units 29,400





For what reason would you question the validity of these data?


Answer:
If 420,000 units are sold and sales at the break-even point are 472,500 units, there is no margin of safety.