John Anderson Company Below Is an Income Statement for John

question 59

Multiple Choice

John Anderson Company Below is an income statement for John Anderson Company:
$\begin{array}{ll}\text { Sales } & \$ 300,000 \\\text { Variable costs } & \underline{(150,000) } \\\text { Contribution margin } & \$ 150,000 \\\text { Fixed costs } & \underline{(100,000) } \\\text { Profit before taxes } & \underline{\$ 50,000}\end{array}$ Refer to John Anderson Company.What was the company's margin of safety?

• A)$50,000
• B)$100,000
• C)$150,000
• D)$25,000

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Definitions:

Optimum

The most advantageous condition or degree of something, where the best possible outcome is achieved.

Feasible Region

In optimization problems, it is the set of all possible points that satisfy the problem's constraints, representing all possible solutions.

Corner-point Solution

A method in optimization problems, especially linear programming, where the optimal solution is found at the vertex or corner of the feasible region.

Feasible Region

The set of all possible points that satisfy a problem’s constraints, used in optimization to find the best solution.