Asked by Bethany Allen on Apr 27, 2024
Verified
Ensley Corporation has provided the following data concerning its only product: 
The margin of safety as a percentage of sales is closest to:
A) 61%
B) 28%
C) 72%
D) 39%
Percentage Of Sales
A financial ratio that compares a particular expense or income to the total sales, expressing the result as a percentage to analyze trends or performance.
- Determine the margin of safety depicted in dollars and in terms of sales percentage.
Verified Answer
BG
Breanna GutierrezMay 02, 2024
Final Answer :
B
Explanation :
Margin of safety = Total Sales - Break-even Sales
= $780,000 - $560,000
= $220,000
Margin of Safety as a percentage of sales = (Margin of Safety / Total Sales) x 100
= ($220,000 / $780,000) x 100
= 28%
Therefore, the closest option is B, 28%.
= $780,000 - $560,000
= $220,000
Margin of Safety as a percentage of sales = (Margin of Safety / Total Sales) x 100
= ($220,000 / $780,000) x 100
= 28%
Therefore, the closest option is B, 28%.
Learning Objectives
- Determine the margin of safety depicted in dollars and in terms of sales percentage.
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