Answered: margin of safety (to the nearest €)?

Business

Accounting

margin of safety (to the nearest €)?

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

Rachel Ltd. manufactures chopping boards. Each unit sells for €15. Variable costs are €5.50 per unit. Fixed costs are budgeted at €87,903.5 for the forthcoming financial year and the company expects to sell 15,000 units. What is the margin of safety (to the nearest €)?

a) €54,597

b) €62,520

c) €138,795

d) €86,205

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