Margin of Safety Heads-Up Company sold 6,600 scooter helmets at $80.00 each this fiscal year. Unit variable costs were $50.00 (includes direct material, direct labor, variable manufacturing overhead, and variable selling expense). Total fixed costs equaled $82,500 (includes fixed manufacturing overhead and fixed selling and administrative expense). Operating income for the year was $115,500. Calculate the margin of safety in units. Select one: a. 3,850 b. 1,375 c. 6,600 d. 4,400 e. 2,750
Margin of Safety Heads-Up Company sold 6,600 scooter helmets at $80.00 each this fiscal year. Unit variable costs were $50.00 (includes direct material, direct labor, variable manufacturing overhead, and variable selling expense). Total fixed costs equaled $82,500 (includes fixed manufacturing overhead and fixed selling and administrative expense). Operating income for the year was $115,500. Calculate the margin of safety in units. Select one: a. 3,850 b. 1,375 c. 6,600 d. 4,400 e. 2,750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Margin of Safety Heads-Up Company sold 6,600 scooter helmets at $80.00 each this fiscal year. Unit variable costs were $50.00 (includes direct material, direct labor, variable manufacturing overhead, and variable selling expense). Total fixed costs equaled $82,500 (includes fixed manufacturing overhead and fixed selling and administrative expense). Operating income for the year was $115,500. Calculate the margin of safety in units.
Select one:
a. 3,850
b. 1,375
c. 6,600
d. 4,400
e. 2,750
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