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:

Loop Diuretic

A type of diuretic drug that acts on the kidneys to promote the excretion of water and salt, used to treat conditions like hypertension and edema.

Furosemide (Lasix)

A diuretic medication often used to treat fluid retention (edema) and high blood pressure by helping the body get rid of excess salt and water.

Hypokalemia

A condition characterized by an abnormally low level of potassium in the blood, which can affect muscular and cardiac function.

Urine Output

A measure of how much urine is produced by the kidneys, indicating hydration status and kidney function.