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%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 6E: Harvey Company produces two models of blenders: the Super Model (priced at 400) and the Special...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

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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%.

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