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oksano4ka [1.4K]
3 years ago
5

has a margin of safety percentage of 20% based on its actual sales. The break-even point is $759000 and the variable expenses ar

e 60% of sales. Q: Given this information, the actual profit is:
Business
1 answer:
lora16 [44]3 years ago
4 0

Answer:  $379,500

Explanation:

Total Sales = <em>Break-even sales + Margin of Safety </em>

The Break-Even sales are therefore = 100% - 20%

= 80% of sales

Total Sales is therefore;

Break-even =   80% * Total Sales

Total Sales = Break-even/80%

= 759,000/0.8

= $948,750

Assuming no fixed costs, actual profit will be Sales less Variable expenses;

=Sales - Variable expenses  

= 1 - 60%

Actual profit = 40% * Sales

= 40% * 948,750

= $379,500

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