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14 January, 21:53

The margin of safety percentage is: total budgeted (or actual) sales in dollars divided by margin of safety in dollars total budgeted (or actual) sales in dollars divided by break-even sales in dollars margin of safety in dollars divided by break-even sales in dollars margin of safety in dollars divided by total budgeted (or actual) sales in dollars

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  1. 15 January, 00:40
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    Margin of safety in dollars divided by total budgeted (or actual) sales in dollars

    Explanation:

    The formula to compute the margin of safety is shown below:

    Margin of safety = Margin of safety in dollars : total budgeted (or actual) sales in dollars

    where,

    The margin of safety = Total sales - break-even sales

    And, the break-even sales (In dollars) = (Total fixed expenses) : (contribution margin ratio)

    The contribution margin ratio = (Contribution : sales) * 100

    So, the last option is correct and the rest options are wrong.
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