(a) If Fama Company, with a break-even point at $360,000 of sales, has actual sales of $480,000,...

Question:

(a) If Fama Company, with a break-even point at $360,000 of sales, has actual sales of $480,000, what is the margin of safety expressed
(1) In dollars and
(2) As a percentage of sales?
(b) If the margin of safety for Watkins Company was 25%, fixed costs were $1,200,000 and variable costs were 75% of sales, what was the amount of actual sales (dollars)?