Numerical - Calculate margin of safety for given sales & B.E.P

Q.  Calculate margin of safety if sales is Rs 3,00,000 and B.E.P is Rs 4,50,000.
- Published on 11 Sep 15

a. Rs 1,00,000
b. Rs 1,50,000
c. Amount of sales < B.E.P, therefore no margin of safety
d. None of the above

ANSWER: Rs 1,00,000

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    Discussion

  • Deep   -Posted on 09 May 24
    Margin of Safety = Rs (-1,50,000)

    The negative value indicates that the actual sales are below the break-even point, meaning there is no margin of safety. It implies that the company needs to increase its sales to reach the break-even point.
  • Deep   -Posted on 09 May 24
    Amount of sales < B.E.P, therefore no margin of safety
  • prashant sawarkar   -Posted on 15 Sep 20
    b.e.p. less than on sale any time and problem is not correct.bep
    sale is3,00,000-2,00,000
  • Dilip Kumar Jha   -Posted on 30 Aug 16
    Sales is less than BEP so there will be no margin of safety.
    Answer is wrong. Right answer will be C.

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