Eastwick Produces and Sells Three Products -
Fixed Costs Total $200,000

question 4

Multiple Choice

Eastwick produces and sells three products. Last month's results are as follows:
$\begin{array}{llr} &\text { P1 } &\text { P2 } &\text { P3 } \\ \text { Revenues } &\$100,000&\$200,000&\$200,000\\ \text {Variable costs } &40,000&140,000&80,000\end{array}$

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Fixed costs total $200,000. What is Eastwick's margin of safety? (Assume the current product mix.)

• A) $83,333.
• B) $40,000.
• C) $460,000.
• D) $115,385.

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