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What is the margin of safety if the break-even sales are $200,000 and the actual

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Question: What is the margin of safety if the break-even sales are $200,000 and the actual sales are $300,000?

Options:

  1. $100,000
  2. $50,000
  3. $200,000
  4. $300,000

Correct Answer: $100,000

Solution: 

Margin of Safety = Actual Sales - Break-even Sales = $300,000 - $200,000 = $100,000.

What is the margin of safety if the break-even sales are $200,000 and the actual

Practice Questions

Q1
What is the margin of safety if the break-even sales are $200,000 and the actual sales are $300,000?
  1. $100,000
  2. $50,000
  3. $200,000
  4. $300,000

Questions & Step-by-Step Solutions

What is the margin of safety if the break-even sales are $200,000 and the actual sales are $300,000?
  • Step 1: Identify the break-even sales amount, which is $200,000.
  • Step 2: Identify the actual sales amount, which is $300,000.
  • Step 3: Subtract the break-even sales from the actual sales: $300,000 - $200,000.
  • Step 4: Calculate the result of the subtraction, which is $100,000.
  • Step 5: The result, $100,000, is the margin of safety.
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