Answer:
Margin of Safety =
Sales – Sales at Break-Even Point
Sales
Margin of Safety = ($550,000 – $385,000) ÷ $550,000 = 30%
PE 21-7B Margin of safety
Junck Company has sales of $550,000, and the break-even point in sales dollars is $385,000. 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 = ($550,000 – $385,000) ÷ $550,000 = 30%
Answer:
Margin of Safety =
Sales – Sales at Break-Even Point
Sales
Margin of Safety = ($550,000 – $385,000) ÷ $550,000 = 30%