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The margin of safety ratiois computed as actual sales divided by b

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The margin of safety ratio
is computed as actual sales divided by break-even sales.
indicates what percent decline in sales could be sustained
before the company would operate at a loss.
measures the ratio of fixed costs to variable costs.
is used to determine the break-even point.A.
is computed as actual sales divided by break-even sales.B
indicates what percent decline in sales could be sustained
before the company would operate at a loss.C
measures the ratio of fixed costs to variable costs.D
is used to determine the break-even point.
Solution
Answer:
Margin of safety ration is calculated as under:
Margin of safety = (Current Sales Break even Level) /
Current Sales
Hence margin of safety is % over and above the breakeven
point (No profit no loss point).
Hence the correct answer is :
The margin of safety ratioindicates what percent decline in
sales could be sustained before the company would
operate at a loss

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The margin of safety ratio is computed as actual sales divided by break -even sales. indicates what percent decline in sales could be sustained before the company would operate at a loss. measures the ratio of fixed costs to variable costs. is used to determine the break-even point.A. is computed as actual sales divided by break -even sales.B indicates what percent decline in sales could be sustained before the company would operate at a loss.C measures the ratio of fixed costs to variable costs.D is used to determine the break-even point. Solution Answer: Margin of safety ration is calculat ...
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