Determine the margin of safety expressed as a percentage

Question

A company with a break-even point at $900,000 in sales revenue and had fixed costs of $225,000. When actual sales were $1,000,000 variable costs were $750,000.

1. Determine the margin of safety expressed in dollars:

a. $1,000,000
b. $900,000
c. $100,000
d. $225,000

2. Determine the margin of safety expressed as a percentage of sales:

a. 10%

b. 90%

c. 1%

d. 9%

3. Determine the contribution margin ratio:

a. 35%

b. 25%

c. 30%

d. 15%

4. Determine the operating income:

a. $35,000

b. $25,000

c. $30,000

d. $15,000

5. Determine the total assets:

a. $1,000,000
b. $1,900,000
c. $2,225,000
d. Cannot determine from information given.