Ruby Baker is the managerial accountant at the Seaside Motel. Ruby advised the Sales Manager that budgeted sales at the motel were 80 rooms, and the motel's breakeven point is 10 units. What is the margin of safety in units at the Seaside Motel?

Question

Quizplus · Accepted Answer

Margin of safety = Actual sales - Breakeven point
If budgeted sales are 80 rooms and the breakeven point is 10 units, then the margin of safety is 80 - 10 = 70 units. Therefore, the correct answer is C)70.

Ruby Baker Is the Managerial Accountant at the Seaside Motel