Gaultier Company had actual sales of $800,000 when break-even sales were $600,000. What is the margin of safety ratio?
A) 25%
B) 33%
C) 67%
D) 75%

Name: Gaultier Company had actual sales of $800,000 when break-even sales were $600,000. What is the margin of safety ratio? A) 25% B) 33% C) 67% D) 75%
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. Here, it is ($800,000 - $600,000) / $800,000 = $200,000 / $800,000 = 0.25 or 25%.

Gaultier Company Had Actual Sales of $800,000 When Break-Even Sales