Exhibit 6-1

Larimer Company has monthly fixed costs totaling $90,000 and variable costs of $5 per unit. Each unit of product is sold for $20.

14. Refer to Exhibit 6-1. Assume that Larimer Company expects to sell 11,000 units of product this coming month. What is the margin of safety in units?

5,000

6,500

7,400

7,000

None of the answer choices is correct.

15. Refer to Exhibit 6-1. Assume that Larimer Company expects to sell 5,000 units of product this coming month. What is the margin of safety in sales dollars?

$1,000

$20,000

$260,000

$15,000

None of the answer choices is correct.