Unformatted text preview: break-even sales) or 6.7% ($50,000 Ã· $750,000), a rather low margin of safety. If, however, its budgeted sales are $900,000, its margin of safety is $150,000 ($900,000 budgeted sales â€“ $750,000 break-even sales) or 20% ($150,000 Ã· $750,000). The competition, economy, and assumptions in the sales budget must be reviewed by management to assess whether 20% is a comfortable margin of safety....
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This note was uploaded on 11/16/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.
- Spring '09