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

Question

Tassone 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:
Break-even sales = $100 per unit F1F1F1S1F1F1F10 34,091 units = $3,409,100
Current sales = $100 per unit F1F1F1S1F1F1F10 46,700 units = $4,670,000
Margin of safety in dollars = Sales - Break-even sales
= $4,670,000 - $3,409,100 = $1,260,900
Margin of safety as a percentage of sales = Margin of safety in dollars F1F1F1S1F1F1F10 Current sales
= $1,260,900 F1F1F1S1F1F1F10 $4,670,000 = 27%

Tassone Corporation Has Provided the Following Data Concerning Its Only