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zzz [600]
3 years ago
6

Margin of safety is computed as: a. Actual sales - Break-even sales. b. Contribution margin - Fixed costs. c. Break-even sales -

Variable costs. d. Actual sales - Contribution margin.
Business
1 answer:
Vera_Pavlovna [14]3 years ago
3 0

Answer:

A. Actual Sales - Break-even sales

Explanation:

In business studies, Margin of safety (MOS) is the difference between actual/projected/budgeted sales and the level of break even sales. It is calculated by subtracting break even sales from projected or budgeted sales.

It is usually calculated by a company to know the level of percentage by which sales can drop in that company, before they start incurring losses. IT IS A MEASURE OF BUSINESS RISK.

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The Fashion Shoe Company operates a chain of women’s shoe shops that carry many styles of shoes that are all sold at the same pr
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Shop 48's new break-even point in unit sales is 14,000 units and dollar sales is $420,000.

<h3>Break even point in units and sales</h3>

Break even point in units sales

Break even point= Fixed cost /Contribution per units

Break even point=$210,000/ ($30-15)

Break even point=$210,000/ $15

Break even point=14,000 units

Break even point in dollar sales:

Break even point in dollar sales =14,000 ×$30

Break even point in dollar sales=$420,000

Therefore Shop 48's new break-even point in unit sales is 14,000 units and dollar sales is $420,000.

Learn more about break even point in units and sales here:brainly.com/question/15281855

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Washburn Company produces earbuds. During the year, manufacturing overhead costs are estimated to be $216,000. Estimated machine
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3. Date     Description                             Debit     Credit

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