Marshall Company had actual sales of $600,000 when break-even sales were $420,000. What is the margin of safety ratio?a.25%.b.30%.c.33.33%d.45%Clear my choice
Question
Marshall Company had actual sales of 420,000. What is the margin of safety ratio?a.25%.b.30%.c.33.33%d.45%Clear my choice
Solution
To calculate the margin of safety ratio, we need to first determine the margin of safety. The margin of safety is the difference between actual sales and break-even sales.
Margin of Safety = Actual Sales - Break-even Sales Margin of Safety = 420,000 Margin of Safety = $180,000
Next, we can calculate the margin of safety ratio by dividing the margin of safety by actual sales and multiplying by 100.
Margin of Safety Ratio = (Margin of Safety / Actual Sales) * 100 Margin of Safety Ratio = (600,000) * 100 Margin of Safety Ratio = 30%
Therefore, the margin of safety ratio is 30%.
Similar Questions
A break-even chart for Product X shows expected unit sales of 5 000 at $1 000 each, maximum profit of $200 000, a break-even point of 2 143 units and a loss of $150 000 if no units are sold. What is the margin of safety? a. 7 143 units b. 2 857 units c. 2 143 unitsd. 5 000 units
Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is _.a.33.33%.b.76.33%.c.37.5% .d.66.67%
Our company sells its product for $100 per unit and has a variable cost of $40 per unit. Total fixed costs equal $18,000. The breakeven in units is 300, and we expect to sell 350 units. What is the margin of safety in dollars?Group of answer choices($5,000)$3,000($3,000)$5,000
Margin of Safety is the difference between .a.planned sales and planned expenses.b.planned sales and actual salesc.planned sales and planned profit .d.actual sales and break-even sales.
Break - even point occurs at 40% of` total capacity, margin of safety will be .a.40% .b.60% .c.85% .d.80% .
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.