If the volume of sales is $4,000,000 and sales at the break-even point amount to $3,200,000, the margin of safety will be 20%.

Name: If the volume of sales is $4,000,000 and sales at the break-even point amount to $3,200,000, the margin of safety will be 20%.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Margin of Safety = (Actual Sales - Break-even Sales) / Actual Sales 
= (4,000,000 - 3,200,000) / 4,000,000 
= 0.2 
= 20%

Therefore, the statement is true.

If the Volume of Sales Is $4,000,000 and Sales at the Break-Even