Answer:
The actual profit is $ 69080
Explanation:
Given
break even point = $376,800
Variable expense = 45% of sales
Margin of safety percentage = 25 %
The total sale can be calculated thus;
Total sales = Break-even sales + Margin of safety
but break-even= (1-0.25)= 0.75 Sales
making total sale subject of the formula we have;
Total sales=($376,800/0.75)=
Total sales = $502400
therefore the margin of safety will be;
Margin of safety =($502400 x 25%)
= $ 125600
The contributing margin is expressed thus;
Contribution margin = Sales-Variable expenses
= (1-0.45) = 0.55 Sales
the actual profit=(0.55 x $ 125600)= $69080
Therefore the actual profit is $69080
