Shambo Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The margin of safety percentage is closest to:

Question

Shambo Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.  The margin of safety percentage is closest to:

Quizplus · Accepted Answer

Margin of safety percentage = (Actual sales - Break-even sales) / Actual sales
= (360,000 - 264,000) / 360,000
= 0.2667 or 26.67%
The closest answer choice is A) 27%.

Shambo Corporation Has Provided the Following Contribution Format Income Statement