Warner Manufacturing Reported Sales of $2,000,000 Last Year (100,000 Units

question 64

Multiple Choice

Warner Manufacturing reported sales of $2,000,000 last year (100,000 units at $20 each) , when the break-even point was 80,000 units. Warner's margin of safety ratio is

• A) 20%.
• B) 25%.
• C) 80%.
• D) 120%.

---

Definitions:

Compounded Semi-annually

A method where interest is calculated and added to the principal twice a year.

Payments

The act of transferring money from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Loan

A sum of money that is borrowed, usually from a financial institution, which requires repayment with interest over a set time frame.

Invested Funds

Money allocated into financial ventures with the expectation of achieving a profit or gaining an income.