Answer (A) is correct . The margin of safety equals sales above the breakeven point. Thus, if the margin of safety is $40,000, the breakeven point must be $360,000 ($400,000 sales – $40,000).
Answer (B) is incorrect because The breakeven point in dollars is the difference between actual sales and the margin of safety.
Answer (C) is incorrect because The breakeven point in dollars is the difference between actual sales and the margin of safety.
Answer (D) is incorrect because The breakeven point in dollars is the difference between actual sales and the margin of safety.
|
