The company's margin of safety in both dollar and percentage terms is $136,000 and 21.79% respectively.
The margin of safety is a company's sales over and above its break-even point are considered margin of safety.
Sales of a company that exceeds its break-even point generate profit.
The formula for Margin of safety(MoS) in dollars is as follows:
Substituting the provided values into the above calculation yields,
= $136,000
To calculate the Margin of safety percentage we use the following formula:
Substituting the provided values into the above calculation yields,
= 21.79%
Hence, The company's margin of safety in both dollar and percentage terms is $136,000 and 21.79% respectively.
Learn more about break-even point:
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