What is the margin of safety (in sales) when a business has sales of $485,000, sales of $225,000 at break-even point, and unit s

Question

3 years ago

6

elling price of $55

1 answer:

lilavasa [31] · Answer 1 · 2022-04-12T00:24:44+03:00

Answer:

Margin of safety= $260,000

Explanation:

Giving the following information:

Sales= $485,000

Break-even point in dollars= $225,000

<u>To calculate the break-even point in sales dollars, we need to use the following formula:</u>

Margin of safety= (current sales level - break-even point)

Margin of safety= 485,000 - 225,000

Margin of safety= $260,000