dean company has sales of $500,000, and the break-even point in sales dollars is $300,000. determine the companys margin of safety percentage. round answer to the nearest whole number.

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{ "quality": "clear", "question_count": 1, "skills_matched": [ "step_cot", "blank_filling_formatter", "explain_then_answer", "tutor", "mastery_adaptive_brevity" ], "needs_drawing": false, "concepts_used": [ "Margin of Safety", "Break-Even Analysis" ], "new_concepts": [], "current_concepts": [ "Margin of Safety", "Break-Even Analysis" ] } ## Identify given values Using the *Margin of Safety* and *Break-Even Analysis* knowledge points $$ \begin{aligned} &\text{Current Sales} = \$500,000 \ &\text{Break-Even Sales} = \$300,000 \end{aligned} $$ ## Calculate margin of safety in dollars Using the *Margin of Safety* knowledge point $$ \begin{aligned} \text{Margin of Safety (Dollars)} &= \text{Current Sales} - \text{Break-Even Sales} \ &= \$500,000 - \$300,000 \ &= \$200,000 \end{aligned} $$ ## Calculate margin of safety percentage Using the *Margin of Safety* knowledge point $$ \begin{aligned} \text{Margin of Safety Percentage} &= \frac{\text{Margin of Safety (Dollars)}}{\text{Current Sales}} \times 100\% \ &= \frac{\$200,000}{\$500,000} \times 100\% \ &= 0.40 \times 100\% \ &= 40\% \end{aligned} $$ Dean Company has sales of $500,000, and the break-even point in sales dollars is $300,000. Determine the company's margin of safety percentage. Round answer to the nearest whole number. 40% { "subject": "Business", "question_type": "Fill-in-the-blank", "knowledge_point": [ "Business", "Accounting", "Margin of Safety" ] }

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Identify given values

Calculate margin of safety in dollars

Calculate margin of safety percentage

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