Question

g Oriole Company had actual sales of $1100000 when break-even sales were $660000. What is the margin of safety ratio? 67% 40% 33% 60%

Answer 1

Answer:

40%

Explanation:

Oriole company has an actual sales of $1,100,000

The break even sales is $660,000

Therefore, the margin of safety can be calculated as follows

= Actual sales-break-even sales/actual sales

= $1,100,000-$660,000/$1,100,000

= $440,000/$1,100,000

= 0.4×100

= 40%

Hence the margin of safety is 40%