Margin of Safetya. If Canace Company, with a break-even point at $386,900 of sales, has actual sales of $530,000, what is the margin of safety expressed (1) indollars 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 $1,596,000, and variable costs were 70% of sales, what was theamount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)

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Asked Oct 31, 2019
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Margin of Safety
a. If Canace Company, with a break-even point at $386,900 of sales, has actual sales of $530,000, 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 $1,596,000, and variable costs were 70% of sales, what was the
amount of actual sales (dollars)?
(Hint: Determine the break-even in sales dollars first.)
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Margin of Safety a. If Canace Company, with a break-even point at $386,900 of sales, has actual sales of $530,000, 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 $1,596,000, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)

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Expert Answer

Step 1

a. 1. Calculate the margin of safety (in Dollars).

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Margin of safety Actual sales - Break even sales =$530.000- $386,900 =$143.100

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Step 2

a. 2. Calculate the margin of safety (as a percentage of sales).

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Actual sales - Break even sales -x100 Margin of safety Actual sales $530,000 $386,900 -x 100 $530.000 27% =

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Step 3

Calculate the contribution marg...

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Contribution margin ratio = Sales- Variable cost =100%-70% - 30 %

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