Fountain Corp

question 25

Multiple Choice

Fountain Corp.has a selling price of $15 per unit and variable costs of $10 per unit.When 14,000 units are sold,profits equaled $45,000.What is the margin of safety?

• A)$210,000
• B)$105,000
• C)$135,000
• D)$75,000

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights and a share in the company's profits via dividends.

Book Value Per Share

A financial measure that divides a company's net asset value less any intangible assets and liabilities by the number of outstanding shares.

Par Value

The face value of a security as stated by the issuing company, which may or may not reflect its market value.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities.