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ABC Inc. manufactures and sells toys. Price and cost data are as follows: Selling price per unit (package of 2 CDs)...................................... $24.00 Variable costs per
Selling price per unit (package of 2 CDs)...................................... | $24.00 |
---|---|
Variable costs per unit: | |
Direct material............................................................................................................... | $5.50 |
Direct labor...................................................................................................................... | $4.50 |
Artist's royalties.............................................................................................................. | $4.00 |
Manufacturing overhead.......................................................................................... | $3.00 |
Selling expenses............................................................................................................ | $1.10 |
Total variable costs per unit............................................................ | $18.10 |
Annual fixed costs: | |
Manufacturing overhead.......................................................................................... | $186,000 |
Selling and administrative....................................................................................... | $260,000 |
Total fixed costs................................................................................ | $446,000 |
Forecasted annual sales volume (120,000 units)......................... | $2,880,000 |
What is the firm's margin of safety?
Select one:
a. 114,286
b. 750,000
c. 1,065,763
d. 1,008,000
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