If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety will be 25%.

Name: If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety will be 25%.
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Quizplus · Accepted Answer

The margin of safety is calculated as (Current Sales - Break-even Sales) / Current Sales. So, ($6,000,000 - $4,800,000) / $6,000,000 = $1,200,000 / $6,000,000 = 0.2 or 20%.

If the Volume of Sales Is $6,000,000 and Sales at the Break-Even