Question

What is the formula for calculating MOS (Margin of Safety) in dollars?

1) Total budg (or actual) sales - BE sales
2) MOS in dollars / Total budg (or actual) sales in dollars
3) MOS in dollars / SP per unit
4) Cannot be determined

Answer 1

The formula for calculating the Margin of Safety (MOS) in dollars is: Total budgeted or actual sales minus BE sales. The correct answer is option 1)

Step-by-step explanation:

The formula for calculating the Margin of Safety (MOS) in dollars is:

1. Total budgeted or actual sales minus Break-Even (BE) sales.
2. MOS in dollars divided by Total budgeted or actual sales in dollars.
3. MOS in dollars divided by Selling Price (SP) per unit.
4. Cannot be determined.

The correct answer is option 1) Total budgeted or actual sales minus BE sales.