Kanmore produces and sells three products.Last month's results are as follows: Fixed costs total $200,000.What is Kanmore's margin of safety? (Assume the current product mix)
A)$83,333
B)$40,000
C)$460,000
D)$115,385

Question

Quizplus · Accepted Answer

Margin of safety = (Actual sales - Break-even sales) / Actual sales= (460,000 - 376,667) / 460,000= 83,333 / 460,000= 0.1811= 18.11%= $460,000 x 0.1811= $83,333

Kanmore Produces and Sells Three Products