Blonde, Inc., is considering dropping a certain product line if it does not have a margin of safety higher than 14.0%. The breakeven sales are P153,500, and the margin of safety is P26,500. Based on this information, the controller has recommended that Blonde keep this product line. Did the controller make the appropriate decision? Group of answer choices No, since the margin of safety ratio of 17.3% is not better than 14.0%. No, since the margin of safety ratio of 14.7% is not better than 14.0%. Yes, since the margin of safety ratio of 17.3% is better than 14.0%. Yes, since the margin of safety ratio of 14.7% is better than 14.0%
Blonde, Inc., is considering dropping a certain product line if it does not have a margin of safety higher than 14.0%. The breakeven sales are P153,500, and the margin of safety is P26,500. Based on this information, the controller has recommended that Blonde keep this product line. Did the controller make the appropriate decision? Group of answer choices No, since the margin of safety ratio of 17.3% is not better than 14.0%. No, since the margin of safety ratio of 14.7% is not better than 14.0%. Yes, since the margin of safety ratio of 17.3% is better than 14.0%. Yes, since the margin of safety ratio of 14.7% is better than 14.0%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
46
Blonde, Inc., is considering dropping a certain product line if it does not have a margin of safety higher than 14.0%. The breakeven sales are P153,500, and the margin of safety is P26,500. Based on this information, the controller has recommended that Blonde keep this product line. Did the controller make the appropriate decision?
Group of answer choices
No, since the margin of safety ratio of 17.3% is not better than 14.0%.
No, since the margin of safety ratio of 14.7% is not better than 14.0%.
Yes, since the margin of safety ratio of 17.3% is better than 14.0%.
Yes, since the margin of safety ratio of 14.7% is better than 14.0%.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education