00:01
In the given question, these data are already given like break -even point, actual sales, fixed cost and variable cost.
00:07
Now the party of the question asks us to find out the margin of safety in dollars.
00:13
So the margin of safety in dollars is the difference between the actual sales in dollars and its break -even point in dollars.
00:25
So this will be actual sales in dollars less the break -even.
00:39
Point in dollars.
00:44
So the actual sales given to us is of one million dollar and the break -even sales or we can see the point is $900 ,000.
00:59
So their difference comes to $100 ,000.
01:03
So the margin of safety in dollars is $100 ,000.
01:09
Now the part we ask us the margin of safety expressed as percentage of dollar.
01:14
Now this will be the margin of safety.
01:17
Safety that we have already calculated in terms of dollar upon the actual sales because margin of safety is to be calculated is what percentage of sales so actual sales in dollar times hundred will give us the required percentage now the margin of safety we have calculated to be one hundred thousand dollars and the actual sales given to us is of one million dollars times 100 will give us the required percentage and that comes to 10%...