Answered: If a business had sales of $4,316,000…

If a business had sales of $4,316,000 and a margin of safety of 20%, the break-even point was Oa. $863,200 Ob. $5,179,200 Oc. $7,768,800 Od. $3,452,800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If a business had sales of $4,316,000 and a margin of safety of 20%, the break-even point was
Oa. $863,200
Ob. $5,179,200
Oc. $7,768,800
Od. $3,452,800

Expert Solution

Step 1

Total sales = Margin of Safety + Break even point
Break even point : At break even point, there is no profit or no loss.
Margin of safety: It is a stage after break even point. There is some profit or loss at Margin of safety.

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