If a Business Had a Capacity of $10,000,000 of Sales

question 33

Essay

If a business had a capacity of $10,000,000 of sales, actual sales of $6,000,000, break-even sales of $4,200,000, fixed costs of $1,800,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?

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Definitions:

Non-MIS Managers

Managers who are not specializing in Management Information Systems but still need to understand and use information technologies in their operational strategies.

Information

Data that has been organized or processed in a way that is meaningful to the recipient, used for making decisions or understanding a situation.

Meaning

The significance, definition, or explanation of a concept, word, or action.

Value

Value typically refers to the importance, worth, or usefulness of something. It can also mean the principles or standards of behavior one judges to be important in life.