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Grant Company has sales of $300,000, and the break-even point in sales dollars is $225,000. Determine the company's margin of safety percentage. Round answer to the nearest whole number.

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Answer:

Margin of safety (%)= 25%

Explanation:

Giving the following information:

JGrant Company has sales of $300,000, and the break-even point in sales dollars is $225,000.

To calculate the margin of safety as a percentage, first, we need to determine the margin of safety ratio:

Margin of safety ratio= (current sales level - break-even point)/current sales level

Margin of safety ratio= (300,000 - 225,000)/300,000= 0.25

As a percentage= 0.25*100= 25%

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