Question

Sales are rs 320000, fixed costs are rs 80000 and variable cost are rs 120000 margin of safety is=

Answer 1

Answer:

Explaination

Profit = sales - cost

Profit = 320000 - 120000 - 80000

= 120000

Margin = profit x 100

sales

=120000 x 100

320000

=37.5%

Answer 2

Answer

periphery of safety is 60

Explanation

Given

Deals = 320000

Fixed cost = 80000

Variable cost = 120000

To find

Periphery of safety = ?

Formula used

Profit rate = donation Value/ trade

donation value = trade-Variable cost

Break Indeed Point = Fixed cost price/( Selling price-Variable cost)

Definite trade value- Deals atB.E.P) / Definite deals value = 100.

result

Profit rate = donation/ trade

= 200 thousand

Profit rate = 0.625

Break Indeed Points = Fixed cost/( Selling price-Variable cost)

= 1.28 lakhs

periphery of Safety = ( factual trade- Deals atB.E.P)/ factual Deals × 100.

= 60

As a result, the Margin of Safety is equal to 60

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