Question

A company's current budget shows the following: budgeted sales are $982,000, break-even sales are $932,200, and fixed expenses are $429,000. The company's margin of safety in dollars is ________.

Answer 1

The margin of safety for the company is calculated by subtracting the break-even sales from the budgeted sales, which in this case is $49,800.

Step-by-step explanation:

The margin of safety in dollars is calculated by subtracting the break-even sales from the budgeted sales. Given that the company's budgeted sales are $982,000 and the break-even sales are $932,200, you can find the margin of safety by performing the following calculation:

Margin of Safety = Budgeted Sales - Break-Even Sales

= $982,000 - $932,200

= $49,800

Therefore, the company's margin of safety in dollars is $49,800.