a) If Fama Company, with a break-even point at $496,000 of sales, has actual sales of $800,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.

b) If the margin of safety for Watkins Company was 45%, fixed costs were $1,841,400, and variable costs were 55% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)