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%
Question
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%
Solution
The Margin of Safety is calculated using the following formula:
Margin of Safety = (Actual Sales - Break-even Sales) / Actual Sales * 100%
Substituting the given values into the formula:
Margin of Safety = (4,00,000 - 2,50,000) / 4,00,000 * 100%
Margin of Safety = 1,50,000 / 4,00,000 * 100%
Margin of Safety = 0.375 * 100%
Margin of Safety = 37.5%
So, the correct answer is c. 37.5%.
Similar Questions
Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity in percentage is .a.50% .b.40% .c.60% .d.45%.
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
otal sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity in percentage is .a.50% .b.40% .c.45%.d.60%
Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales in value .a.Rs. 8,333.b.Rs. 7,936.c.Rs. 9,090.d.Rs. 7,353.
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
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.