Answer:
Margin of safety ratio= 0.36= 36%
Explanation:
Giving the following information:
Liu Company has sales of $48,500,000, and the break-even point in sales dollars is $31,040,000.
To calculate the margin of safety as a percentage, we need to use the following formula:
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= (48,500,000 - 31,040,000) / 48,500,000
Margin of safety ratio= 0.36= 36%
