If the margin of safety is $25000 and the budgeted revenue is $45000, then the margin of safety in percentage will be __________?
Correct answer: A. 55.56%
- A. 55.56%
- B. 25.50%
- C. 28%
- D. 45.00%
Explanation
Margin of safety percentage is calculated as margin of safety divided by budgeted revenue, multiplied by 100: $25,000 ÷ $45,000 × 100 = 55.56%.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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