39. Sales are 3,20,000, fixed costs are 80,000 and variable costs are 1,20,000. What is the
safety margin?
(a) * 18,900
(b) *20,000
tot 1,92,000
(d) * 1,28,000
(e) * 1,31,000
Answers
Explanation:
Margin of safety = actual sales - BEP
P/V ratio= sales - variable costs/ sales × 100
= 3,20,000 - 1,20,000 / 3,20,000 × 100
= 62.5%
BEP = Fixed cost / P/V ratio
= 80,000/62.5 × 100
= 1,28,000
Margin of safety = actual sales - BEP
= 3,20,000 - 1,28,000
= 192,000
Margin of safety = 1,92,000
Therefore, (c) 1,92,000
Margin of safety = 1,92,000
Answer:
(option) 1,92,000
Explanation:
Sales are 3,20,000
Fixed costs are 80,000
Variable costs are 1,20,000
Solution :
★ P/V Ratio = S - V / S × 100
⇒ 3,20,000 - 1,20,000 / 3,20,000 × 100
⇒ 62.5%
P/V Ratio = 62.5%
Break Even Point = Fixed Cost / P/V Ratio
⇒ 80,000/62.5 × 100
⇒ 1,28,000
Break Even Point = 1,28,000
Margin safety = Sales - Break even sales
⇒ 3,20,000 - 1,28,000
⇒ 1,92,000
Margin safety = 1,92,000
∴ (option) 1,92,000
Margin safety = 1,92,000