Answer:
Margin of Safety =
Sales – Sales at Break-Even Point
Sales
Margin of Safety
= ($1,200,000 – $960,000) ÷ $1,200,000 = 20%
PE 21-7A Margin of safety
Vizla Inc. has sales of $1,200,000, and the break-even point in sales dollars is $960,000. Determine the company’s margin of safety as a percent of current sales.
Answer:
Margin of Safety =
Sales – Sales at Break-Even Point
Sales
Margin of Safety
= ($1,200,000 – $960,000) ÷ $1,200,000 = 20%
Answer:
Margin of Safety =
Sales – Sales at Break-Even Point
Sales
Margin of Safety
= ($1,200,000 – $960,000) ÷ $1,200,000 = 20%