Waterway Industries Equipment has actual sales of 1000000 an

Waterway Industries Equipment has actual sales of $1000000 and a break-even point of $650000. How much is its margin of safety ratio?

Solution

Margin of safety ratio = (Actual sales-Break even sales)*100/Actual sale

= (1000000-650000)*100/1000000

Margin of safety ratio = 35%

So answer is d) 35%