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What the margin of safety as a percentage of sales is

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Reference no: EM132751506

Problem 1: Abby Broyles sells handmade bags at farmer's markets for $120 per bag. Current sales are 12,300 bags and break-even sales are 10,824 bags. The margin of safety as a percentage of sales is closest to:

a. 12%
b. 88%
c. 14%
d. 86%

Problem 2: Cal Cunningham Company is considering increasing its single product's selling price by $2 per unit due to an increase in its variable labor cost of $2 per unit. Break-even point in units will:

a. increase
b. not change
c. decrease
d. change but direction cannot be determined.

Reference no: EM132751506

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