Junck Company has sales of $550,000, and the break-even point in sales dollars is $385,000. Determine the company’s margin

Junck Company has sales of $550,000, and the break-even point in sales dollars is $385,000. Determine the company’s margin of safety as a percent of current sales.

Answer:








Margin of Safety = 
Sales – Sales at Break-Even Point 
Sales 
Margin of Safety =   ($550,000 – $385,000) ÷ $550,000 = 30% 


Vizla Inc. has sales of $1,200,000, and the break-even point in sales dollars is $960,000. Determine the company’s margin of safety as a percent of current sales.

Answer:








Margin of Safety = 
Sales – Sales at Break-Even Point 
Sales 
Margin of Safety 

=   ($1,200,000 – $960,000) ÷ $1,200,000 = 20%