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Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is _.a.33.33%.b.76.33%.c.37.5% .d.66.67%

Question

Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is _.a.33.33%.b.76.33%.c.37.5% .d.66.67%
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Solution 1

The Margin of Safety is calculated using the following formula:

Margin of Safety = (Actual Sales - Break-even Sales) / Actual Sales * 100%

Substituting the given values into the formula:

Margin of Safety = (4,00,000 - 2,50,000) / 4,00,000 * 100%

Margin of Safety = 1,50,000 / 4,00,000 * 100%

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