Below is an income statement for Howell Company: Sales $600,000 Variable costs (150,000) Contribution margin $450,000 Fixed costs (300,000) Profit before taxes $150,000 Refer to Howell Company. What was Howell’s margin of safety? Select one: a. $300,000 b. $200,000 c. $150,000 d. $175,000

Below is an income statement for Howell Company: Sales $600,000 Variable costs (150,000) Contribution margin $450,000 Fixed costs (300,000) Profit before taxes $150,000 Refer to Howell Company. What was Howell’s margin of safety? Select one: a. $300,000 b. $200,000 c. $150,000 d. $175,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Howell Company
Below is an income statement for Howell Company:

Sales	$600,000
Variable costs	(150,000)
Contribution margin	$450,000
Fixed costs	(300,000)
Profit before taxes	$150,000

Refer to Howell Company. What was Howell’s margin of safety?

Select one:

a. $300,000

b. $200,000

c. $150,000

d. $175,000

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