Calculate the Margin of Safety, expressed as a percentage of Sales, given the following data: Sales = $6,000,000.00 Variable Costs = 60% of Sales Fixed Costs = $1,800,000.00 Break-Even Sales = $4,500,000.00 Maximum Capacity of Sales = $10,000,000.00

Calculate the Margin of Safety, expressed as a percentage of Sales, given the following data: Sales = $6,000,000.00 Variable Costs = 60% of Sales Fixed Costs = $1,800,000.00 Break-Even Sales = $4,500,000.00 Maximum Capacity of Sales = $10,000,000.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Calculate the Margin of Safety, expressed as a percentage of Sales, given the following
data:
Sales = $6,000,000.00
Variable Costs = 60% of Sales
Fixed Costs = $1,800,000.00
Break-Even Sales - $4,500,000.00
Maximum Capacity of Sales = $10,000,000.00
15.0%
18.0%
33.3%
25.0%

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