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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the formula for calculating Margin of Safety?
💡 Hint: Think about how sales relate to the break-even point.
Question 2
Easy
If a company has actual sales of ₹50,000 and break-even sales of ₹30,000, what is the MoS?
💡 Hint: Subtract the break-even sales from actual sales.
Practice 4 more questions and get performance evaluation
Interactive Quizzes
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
Question 1
What does Margin of Safety (MoS) represent?
- Amount of profit
- Difference between sales and costs
- How much sales can drop before a loss
💡 Hint: Think about what happens if sales decrease.
Question 2
True or False: A higher Margin of Safety means a business is more vulnerable to losses.
- True
- False
💡 Hint: Consider the implications of a high buffer in sales.
Solve 1 more question and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
A café has fixed costs of ₹80,000 and sells coffee for ₹200, with variable costs of ₹120. How many cups must it sell to break-even? If it sells 600 cups, what is the MoS?
💡 Hint: Find the BEP in units first, then calculate MoS.
Question 2
A startup determines it has Actual Sales of ₹250,000 with a BEP of ₹180,000. What strategies can it implement to enhance its MoS?
💡 Hint: Consider both cost-cutting and revenue-enhancing strategies.
Challenge and get performance evaluation