Final answer:
The margin of safety is the difference between actual sales and break-even sales, which in this case is $292,000, corresponding to option B.
Step-by-step explanation:
The margin of safety is calculated as the difference between the actual sales and the sales at the break-even point.
In this case:
- Actual Sales = $984,000
- Break-even Sales = $692,000
The margin of safety in dollars is calculated as follows:
Margin of Safety = Actual Sales - Break-even Sales = $984,000 - $692,000 = $292,000.
The correct answer is option B: $292,000.