Margin of Safety

a. If Canace Company, with a break-even point at $456,000 of sales, has actual sales of $570,000, 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.

1. $114,000

2. 20 %

b. If the margin of safety for Canace Company was 35%, fixed costs were $1,583,400, and variable costs were 65% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $