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Liu Inc. has sales of $48,500,000, and the break-even point in sales dollars is $31,040,000. Determine the company's margin of safety as a percent of current sales. Enter your answer as a whole number.

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osondumartins

Answer:0.36

Explanation:Margin of safety ratio is mathematically represented by the difference between the budgeted sales and the break-even point in sales,divided by the budgeted sales.

Margin of safety=(budgeted sales÷break-even sales)÷budgeted sales.

Margin of safety=($48,500,000÷$31,040,000)÷$48,500,000

Margin of safety=0.36.

BREAK-EVEN SALES IS THE TOTAL AMOUNT OF SALES INCOME, WHERE THERE IS NO PROFIT AND THERE IS NO LOSS, AT THE BREAK-EVEN POINT THE BUSINESS ORGANISATION HAS MADE NO PROFIT.

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