The Following Monthly Data Are Available for Seasons Company Which

question 23

Multiple Choice

The following monthly data are available for Seasons Company which produces only one product: Selling price per unit, $42; Unit variable expenses, $14; Total fixed expenses, $84,000; Actual sales for the month of June, 5,000 units.How much is the margin of safety for the company for June?

• A)$56,000
• B)$84,000
• C)$126,000
• D)$2,000

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Breakeven Volume

The quantity of goods or services that must be sold to cover fixed and variable costs, resulting in no profit or loss.

Units

A measure of quantity or amount used in the context of production, inventory, or sales within various sectors.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, contributing to the coverage of fixed costs and profit generation.