Margin of Safety

a. If Go-Go Buggies Company, with a break-even point at $6,000,000 of sales, has actual sales of $8,000,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales?

1. Margin of Safety (dollars) $________________

2. Margin of Safety (percentage) % ______________

b. If the margin of safety for Beartooth Company was 15%, fixed costs were $9,180,000, and variable costs were 60% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)

Actual sales in dollars $_____________________