Question

The Dean Company has sales of $196,000, and the break-even point in sales dollars of $152,880....

The Dean Company has sales of $196,000, and the break-even point in sales dollars of $152,880. Determine the company's margin of safety percentage. Round answer to the nearest whole number.
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Answer #1

Solution:

Margin of Safety

Margin of safety is the difference between Total Sales and Break Even Sales.

Margin of Safety in dollars = Total Sales $196,000 – Break Even Sales $152,800 = $43,200

Margin of Safety in percentage = Margin of safety in dollar / Total Sales x 100

= 43,200 / 196,000 x 100

= 22.04% or 22%

Margin of safety in percent = 22%

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