Margin of safety

a. If Kirwan Company, with a break-even point at $374,400 of sales, has actual sales of $520,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? 1.52.% b. If the margin of safety for Kirwan Company was 25%, fixed costs were $1,183,125, and variable costs were 75% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) X Feedback r check My Work a. (Sales minus sales at break-even) divided by sales equals margin of safety. b. Sales minus variable costs equals contribution margin. Fixed costs divided by unit contribution margin equals break-even point. (Sales minus sales at break-even) divided by sales equals margin of safety