"If a business had a capacity of $8,000,000 of sales, actual sales of $5,000,000, break-even sales of $3,500,000, fixed costs of $1,400,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales

30%

Explanation:

The computation of margin of safety is given below:-

Actual Sales = $5,000,000

Break-even sales = $3,500,000

Margin of safety =Actual Sales - Break even sales

= $5,000,000 - $3,500,000

= $1,500,000

Margin of safety in percentage = Margin of safety ÷ Actual Sales × 100

= $1,500,000 ÷ $5,000,000 × 100

= 30%

Therefore for computing the Margin of safety in percentage we simply divide actual sales by margin of safety and here we will not considered Sales $8,000,000 and variable costs 60%.

D. Caddy gets pregnant.