Pricher Corporation”s income statement for last year appears below:
Sales
$2,000,000
Cost of goods sold:
Direct materials
$500,000
Direct labor (variable)
150,000
Variable manufacturing overhead
50,000
Fixed manufacturing overhead
600,000
Gross margin
$500,000
1,300,000
Selling and administrative expenses:
150,000
700,000
Variable
100,000
Fixed
300,000
400,000
Net operating income
$ 300,000
If fixed selling and administrative expenses increase by $60,000 and sales remain at the $2,000,000 level, what is the margin of safety in sales dollars:
A) $300,000
B) $200,000
C) $500,000
D) $400,000