Question

Budgeted sales are $982,000, break-even sales are $932,200, and fixed expenses are $429,000. The company's budgeted margin of safety in dollars is Blank______.

Multiple choice question.

$503,200


$553,000


$49,800


$(379,200)

Answer 1

The margin of safety can be calculated using the formula:

\[
\text{Margin of Safety} = \text{Budgeted Sales} - \text{Break-even Sales}
\]

Given:
- Budgeted Sales = $982,000
- Break-even Sales = $932,200

Now plug in the values:

\[
\text{Margin of Safety} = 982,000 - 932,200 = 49,800
\]

So, the budgeted margin of safety in dollars is **$49,800**.

The correct answer is **$49,800**.