Question

g "A company with an operating income of $88,000 and a contribution margin ratio of 70% has a margin of safety of: "

Answer 1

$125,714

Step-by-step explanation:

Calculation for A company margin of safety

Using this formula

Margin of safety =Operating net income ÷contribution margin ratio

Let plug in the formula

Margin of safety =$88,000 ÷ 0.70

Margin of safety= $125,714

Therefore A company margin of safety will be $125,714