The margin of safety percentage for Garfield Corporation is: (Round any intermediary percentage calculations to the nearest whole percent.)
Margin of safety = (Actual sales - Break even point )÷Actual Sales
Break even point= Total fixed cost÷(Price per unit-variable cost per unit)
Fixed expenses of commission = 20% of sales value
Fixed expenses of commission =20% of 60000×7=420000×20%=84000
Variable expenses=Material + labour+overhead+ marketing/admin
VC=70%of70000÷60000+80%of 30000÷60000+70%of 80000÷60000+ 60%of50000÷60000
VC=0.82+0.4+0.93+0.5
VC=2.65
Fixed cost =21000 of material+6000 of labour+24000 of overhead+20000 of marketing
Fixed cost = 71000
Total fixed cost=71000+84000=155000
Break even point=155000÷(7-2.65)=155000÷4.35=35632 units
Margin of safety =( 60000-35632)/60000=24368/60000
=40.61%
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