Narchie sells a single product for $50. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $374,400. Current sales total 20,000 units. If Narchie sells 28,000 units, its safety margin will be:

Narchie sells a single product for $50. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $374,400. Current sales total 20,000 units. If Narchie sells 28,000 units, its safety margin will be:

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

Narchie sells a single product for $50. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $374,400. Current sales total 20,000 units.

If Narchie sells 28,000 units, its safety margin will be:

A. $374,400.

B. None of the answers is correct.

C. $1,400,000.

D. $152,000.

E. $1,248,000.

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