COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the margin of safety if the break-even output (sales) is 250 and the actual sales is 600?
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600
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450
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350
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250
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Explanation:
Detailed explanation-1: -The margin of safety is the amount sales can fall before the break-even point (BEP) is reached and the business makes no profit. This calculation also tells a business how many sales it has made over its BEP.
Detailed explanation-2: -Calculation of M.O.S-M.O.S.= Actual Sales – B.E.P. Sales = 100000-60000= ₹40, 0000 OR M.O.S.
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