Margin of Safety a. If Canace Company, with a break-even point at $492,000 of sales, has actual sales of $600,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. 2. % b. If the margin of safety for Canace Company was 30%, fixed costs were $1,789,200, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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### Margin of Safety

#### a. 
If Canace Company, with a break-even point at $492,000 of sales, has actual sales of $600,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.

1. [Fill in the blank for dollar amount]
2. [Fill in the blank for percentage] %

#### b.
If the margin of safety for Canace Company was 30%, fixed costs were $1,789,200, and variable costs were 70% of sales, what was the amount of actual sales (dollars)?

(*Hint: Determine the break-even in sales dollars first.*)

[Fill in the blank for actual sales]
Transcribed Image Text:### Margin of Safety #### a. If Canace Company, with a break-even point at $492,000 of sales, has actual sales of $600,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. [Fill in the blank for dollar amount] 2. [Fill in the blank for percentage] % #### b. If the margin of safety for Canace Company was 30%, fixed costs were $1,789,200, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (*Hint: Determine the break-even in sales dollars first.*) [Fill in the blank for actual sales]
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