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Evgesh-ka [11]
2 years ago
9

If Revere Company expects to sell 1,250 units of its product at $12 per unit, and break-even sales for the product are $13,200,

what is the margin of safety ratio?
Business
1 answer:
djverab [1.8K]2 years ago
6 0

Answer:

Margin of safety ratio= 0.12

Explanation:

Giving the following information:

Sales= 1,250 units

Break-even point in sales= $13,200

Selling price= $12

<u>First, we need to determine the current sales in dollars:</u>

Sales in dollars= 1,250*12= $15,000

<u>Now, the margin of safety ratio:</u>

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

Margin of safety ratio= (15,000 - 13,200) / 15,000

Margin of safety ratio= 0.12

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