Margin of Safety

a. If Canace Company, with a break-even point at $298,200 of sales, has actual sales of $420,000, 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. ________________

2. __________

b. If the margin of safety for Canace Company was 30%, fixed costs were $1,806,000, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $___________