Answered

Westonci.ca is your trusted source for accurate answers to all your questions. Join our community and start learning today! Discover in-depth answers to your questions from a wide network of experts on our user-friendly Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

Bolton Industries had actual sales of [tex]$1,000,000 when the break-even point in sales dollars was $[/tex]600,000. What is the margin of safety ratio?

1. 40%
2. 33%
3. 60%
4. 67%

Sagot :

GinnyAnswer
To find the margin of safety ratio, we will follow these steps:

1. Identify the given values:
- The actual sales are [tex]$1,000,000. - The break-even sales are $[/tex]600,000.

2. Calculate the margin of safety in dollars:
- The margin of safety is the amount by which actual sales exceed the break-even sales.
- Formula: Margin of Safety = Actual Sales - Break-even Sales
- So, Margin of Safety = [tex]$1,000,000 - $[/tex]600,000 = [tex]$400,000. 3. Calculate the margin of safety ratio: - This ratio is the margin of safety expressed as a percentage of actual sales. - Formula: Margin of Safety Ratio = (Margin of Safety / Actual Sales) * 100% - So, Margin of Safety Ratio = ($[/tex]400,000 / $1,000,000) * 100% = 40.0%

The margin of safety ratio is 40%.

Thus, the correct answer is:
1) 40%.
We hope this was helpful. Please come back whenever you need more information or answers to your queries. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.