Awtis Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $376,800 and the variable expenses are 45% of sales. Given this information, the actual profit is:

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

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