The Following Is Last Month's Contribution Format Income Statement What Is the Company's Margin of Safety in Dollars?
A)$1,500,000

question 91

Multiple Choice

The following is last month's contribution format income statement: $$\begin{array} { | l | c | } \hline \text { Sales } ( 15,000 \text { units } ) & \$ 1,500,000 \\\hline \text { Less variable expenses } & 900,000 \\\hline \text { Contribution margin } & 600,000 \\\hline \text { Less fixed expenses } & 500,000 \\\hline \text { Net income } & \$ 100,000 \\\hline\end{array}$$ What is the company's margin of safety in dollars?

• A)$1,500,000.
• B)$250,000.
• C)$100,000.
• D)$600,000.

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Definitions:

Large Company Stocks

Shares issued by corporations with a large market capitalization, often considered less risky investments.

Increased Value

The appreciation or rise in the worth of an asset or investment over a period of time.

Variance

A measure of the spread between numbers in a data set, indicating how much the numbers differ from the mean.

Arithmetic Average

A statistical measure of central tendency calculated by summing a set of values and dividing by the number of values in the set.