Question

Dean Company has sales of $163,000, and the break-even point in sales dollars is $102,690. Determine the company's margin of safety percentage. Round answer to the nearest whole number. fill in the blank 1 %

Answer 1

Answer:

37%

Explanation:

The Dean company has sales of $163,000

The break even point in sales dollars is $102,690

Therefore, the company's margin of safety can be calculated as follow;

Margin of safety = (Sales - Break even sales ) / Sales

Margin of safety = ($163,000 - $102,690) / $163,000

Margin of safety = $60,310 / $163,000

Margin of safety = 0.37 × 100

Margin of safety = 37%