Tag: Margin Of Safety

Alex Trading Ltd has the information shown below.

• actual sales for November – £320,000
• break-even sales for November – £400,000
• total fixed costs for November – £150,000

What is the margin of safety for November?

Select ONE answer:

1. £80k negative
2. £80k positive
3. £170k negative
4. £250k positive

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – £400k – £320k
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which name is given to the difference between a company’s actual sales and break-even sales?

Select ONE answer:

1. margin of safety
2. marginal cost
3. marginal C-V-P (cost-volume-profit) analysis
4. marginal revenue

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.