This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking. The CS ratio for a business is 0.4 and its fixed costs are $1,600,000. Budget revenue has been set at 6 times the amount of the fixed costs. What is the margin of safety % measured in revenue?
【参考答案及解析】
The breakeven revenue is FC/CS = $1,600,000/0.4 = $4,000,000 Budget revenue is FC × 6 = $1,600,000 × 6 = $9,600,000 Margin of safety is = (9,600,000 – 4,000,000)/9,600,000 = 58.3%
The breakeven revenue is FC/CS = $1,600,000/0.4 = $4,000,000 Budget revenue is FC × 6 = $1,600,000 × 6 = $9,600,000 Margin of safety is = (9,600,000 – 4,000,000)/9,600,000 = 58.3%