Victorin Corporation has provided the following data concerning its only product: The margin of safety as a percentage of sales is closest to:

Question

Victorin Corporation has provided the following data concerning its only product:  The margin of safety as a percentage of sales is closest to:

Quizplus · Accepted Answer

Margin of safety in dollars = Total actual sales - Break-even sales
= 27,000 units F1F1F1S1F1F1F10 $210 per unit - 21,870 units F1F1F1S1F1F1F10 $210 per unit
= $5,670,000 - $4,592,700 = $1,077,300
Margin of safety percentage = Margin of safety in dollars F1F1F1S1F1F1F10 Total actual sales
= $1,077,300 F1F1F1S1F1F1F10 $5,670,000 = 19%

Victorin Corporation Has Provided the Following Data Concerning Its Only