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ID: 2523651 • Letter: W
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w.com/1m/takeAssignment/takeAssignmentMaando?nwokeraassignments&takeAssignmentSessionLocator-assign; ??? B: Show Me How Cakulator Margin of Safety a. If Canace Company, with a break-even point at $473,100 of sales, has actual sales of $570,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number 196,900 2. b. If the margin of safety for Canace Company was 25%, ficed costs were $1,087,500, and variable costs were 75% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) 4,350,000x Check ty Work a. (Sales minus sales at break even) divided by sales equals margin of safety. b. Sales minus variable costs equals contribution marpin. Flxed costs divided by unit contribution maroin equals break-even point. (Sales minus sales at break-even) divided by sales equals margin of safety Check My Next All work saved Email Instructor Save and Exit Submit Assignment for GradingExplanation / Answer
Answer:-Margin of safety=Actual sales – BEP sales
=$5800000-$4350000
=$1450000
Explanation:- BEP sales in dollar = Fixed cost/Contribution margin ratio
=$1087500/25% =$4350000
Actual sales =BEP sales/Margin of safety %
=$4350000/25% =$5800000
Contribution margin ratio=1-Variable cost ratio
=1-.75 =25%
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