Label Corp. recorded sales of $2,235,106 for the most recent year. The company's breakeven sales point...
Label Corp. recorded sales of $2,235,106 for the most recent year. The company's breakeven sales point (in dollars) is $1,750,000, and its margin of safety ratio (MOS%) at the current sales level is 26%. What sales (in dollars) would be needed to increase the company's MOS% to 32%?
Multiple Choice
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$2,189,239.
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$2,573,529.
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$2,844,879.
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$2,936,289.
Homework Answers
Margin of safety = (Sales-Break even sales) /Sales
Let sales be x
(x - 1,750,000)/x = 0.32
x - 1,750,000 = 0.32x
x - 0.32x = 1750,000
x = 1,750,000/0.68
= 2,573,529
Option B
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