Bolton Industries had actual sales of $1000000 when break-even sales were $600000. What is the margin of safety ratio?
A) 40%
B) 33%
C) 60%
D) 67%

Name: Bolton Industries had actual sales of $1000000 when break-even sales were $600000. What is the margin of safety ratio? A) 40% B) 33% C) 60% D) 67%
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Question

Quizplus · Accepted Answer

The margin of safety ratio is calculated as (Actual Sales - Break-even Sales) / Actual Sales. So, ($1,000,000 - $600,000) / $1,000,000 = $400,000 / $1,000,000 = 0.4 or 40%.

Bolton Industries Had Actual Sales of $1000000 When Break-Even Sales