Danny's Lawn Equipment has actual sales of $800000 and a break-even point of $520000. How much is its margin of safety ratio?
A) 35%
B) 46%
C) 54%
D) 65%

Name: Danny's Lawn Equipment has actual sales of $800000 and a break-even point of $520000. How much is its margin of safety ratio? A) 35% B) 46% C) 54% D) 65%
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The margin of safety ratio is calculated as (Actual Sales - Break-even Sales) / Actual Sales. So, ($800,000 - $520,000) / $800,000 = $280,000 / $800,000 = 0.35 or 35%.

Danny's Lawn Equipment Has Actual Sales of $800000 and a Break-Even