Answer:
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
