![]() ![]() ![]() The margin of safety formula can also be expressed in dollar. Margin of Safety (Current Sales Level Breakeven Point) / Current Sales Level x 100. The break-even formula in sales dollars is calculated by multiplying the price of each unit by the answer from our first equation. Variable Costs Jeans = $60 × 6,000 = $360,000 In accounting, the margin of safety is calculated by subtracting the break-even point amount from the actual or budgeted sales and then dividing by sales the result is expressed as a percentage. Let’s calculate the break-even point in dollars for the sales mix. We should calculate the contribution margin per unit for each product as the first step in break-even analysis for the sales mix.Ĭalculation of the weighted average contribution margin is the second step in break-even analysis. Information about expected sales price, variable costs, fixed costs, and the proportion in the sales mix for the second quarter is shown in the table below. X-One Fashion LLC is selling three products: jeans, T-shirts, and sweaters.
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