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# CSTR Sample Assessment 1 & 2

GeorgiaH
AAT Student Posts:

**107**
Hello,

Can anybody help me with task 7 on sample assessment 1 (question 8 on sample assessment 2)

I am really struggling to understand how to work out the margin of safety/margin of safety revenue and working it out as a percentage I have read over the answers over and over again but doesn't seem to help!

Any tips please?

Thanks

Can anybody help me with task 7 on sample assessment 1 (question 8 on sample assessment 2)

I am really struggling to understand how to work out the margin of safety/margin of safety revenue and working it out as a percentage I have read over the answers over and over again but doesn't seem to help!

Any tips please?

Thanks

0

## Comments

2The margin of safety is every unit produced after the BEP. so part C is 4000 units - BEP 2400= 1600.

the margin of safety as a % is : MOS in units/ forecasted 4000 units produced x100

1600/4000= .40 x100= 40%

part e) if a further 20k is added to the fixed costs of 60k the BEP in units is 80000/25= 3200BEP.

MOS in units is 5000- 3200= 1800

MOS % is 3200/ 5000 units produced x100 = 36%

MOS in revenue is 5000- 3200 = 1800 BEP units x £39.00 cost per item = 70200

107