Final answer:
The bakery's break-even point, calculated using the margin of safety, is £57,142.86. However, this calculated value does not match any of the provided options exactly, suggesting a potential mistake. Given the options provided, the closest (but not accurate) value to the calculated break-even sales is £48,000.
Step-by-step explanation:
To calculate the break-even point of the bakery, we need to first determine what the margin of safety represents. The margin of safety is the percentage by which actual or projected sales exceed the break-even sales. Since the bakery has a margin of safety of 40%, this means that its current sales of £80,000 are 40% above its break-even sales. To calculate the break-even sales, we can set up the following equation:
Sales = Break-even Sales + (Break-even Sales x Margin of Safety %)
£80,000 = Break-even Sales + (Break-even Sales x 0.40)
£80,000 = Break-even Sales (1 + 0.40)
£80,000 = Break-even Sales (1.40)
Break-even Sales = £80,000 / 1.40
Break-even Sales = £57,142.86 (rounded to the nearest pound)
Since this value is not one of the options, we need to re-evaluate the options provided, considering the nearest value to our calculated break-even point:
A. £62,000
B. £45,000
C. £48,000
D. £32,000
Option B is the closest to our calculated figure; therefore, it is likely that there was a mistake in the calculation or in the options given. In practice, the closest correct answer given the options would be £48,000. However, please note that the actual calculated value I found did not match any of the options exactly, which suggests there may be a discrepancy in the numbers provided or a mistake in the question.