Margin of Safety a. If Canace Company, with a break-even point at $325,000 of sales, has actual sales of $500,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2. % b. If the margin of safety for Canace Company was 35%, fixed costs were $1,383,200, and variable costs were 65% of sales, what was the amount of actual sales. (dollars)? (Hint: Determine the break-even in sales dollars first.)
Margin of Safety a. If Canace Company, with a break-even point at $325,000 of sales, has actual sales of $500,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2. % b. If the margin of safety for Canace Company was 35%, fixed costs were $1,383,200, and variable costs were 65% of sales, what was the amount of actual sales. (dollars)? (Hint: Determine the break-even in sales dollars first.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Margin of Safety**
**a.** If Canace Company, with a break-even point at $325,000 of sales, has actual sales of $500,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.
1. $ ________
2. ________ %
**b.** If the margin of safety for Canace Company was 35%, fixed costs were $1,383,200, and variable costs were 65% of sales, what was the amount of actual sales (dollars)? *(Hint: Determine the break-even in sales dollars first.)*
$ ________
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