Proctor Company has fixed costs of $315,000 and a contribution margin ratio of 24%. If sales are expected to be $1,500,000, what is the margin of safety, in percent?
What will be an ideal response?
Break-even point in dollars sales = $315,000/0.24 = $1,312,500
Margin of safety in percent = ($1,500,000 - $1,312,500)/$1,500,000 = 12.5%
Business
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