Dean Company has sales of $166,000, and the break-even point in sales dollars is $99,600. Determine the company's margin of safety percentage. Round answer to the nearest whole number.

The margin of safety for Dean Company is 40% as calculated below.

Explanation:

The margin of safety formula is given as:(Current level sales-Break-even sale)/current level sales

Current level salesis $166,000

break-even sales is $99600

Margin of safety=($166000-$99600)/$166000*100

Margin of safety=40%

This implies that sales level would have to fall by 40% before Dean Company records zero profit .

But if the sales level fall by more than 40% for the company to incur losses