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What is the current margin of safety in sales revenue

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Question - Coffee & Biscuit sells specialist coffee beverages from a rented cart at the local street market. They also supply free biscuits and napkins to their customers. Provided below are the details from the statement of profit or loss for May 2021.

$

Sales revenue 27,000

Cost of beverages 4,600

Cost of biscuits 1,100

Cost of napkins 200

Rent of Cart 2,000

Wages 6,500

Required -

1. Calculate the net profit for May 2021 (ignoring taxes).

2. If the cost of beverages, biscuits and napkins are classified as variable costs, and the rent of cart and wages are classified as fixed costs, calculate the break-even sales revenue in dollars.

3. What is the current margin of safety in sales revenue?

Reference no: EM133128493

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