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Stockmaster Corporation has provided the following contribution format income statement. Assume that the following informatio

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Answer #1

Contribution margin ratio=Contribution margin/Sales

=(128,000/320,000)=0.4

Hence breakeven sales=(Fixed cost/Contribution margin ratio)

=121600/0.4=$304,000

Margin of safety=Total sales-Breakeven sales

=320,000-304,000

=$16,000

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