When margin of safety as a percentage of sales is 25%, the share of sales at BEP is:
A75%
B25%
C50%
D100%
Answer & Solution
Correct answer: A. 75%
1. Sales = BEP sales + MOS.
2. If MOS is 25% of sales, BEP sales must be 75% of sales.
3. The two add up to 100%.
4. Hence the BEP share is 75%.
_Source: ICAI BoS Inter Paper 3, Ch 14 "Marginal Costing", §14.6 ¶4_
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