Assume a Sales Volume of 6,000 Units, Unit Selling Price

question 39

Multiple Choice

Assume a sales volume of 6,000 units, unit selling price of $20, unit variable cost of $12, and total fixed costs of $20,000.What is the margin of safety in sales dollars?

• A)$25,000
• B)$50,000
• C)$70,000
• D)$120,000

---

Definitions:

Closely Held Corporations

Corporate entities characterized by a small number of shareholders, with shares that do not trade on public exchanges and are often family-owned or controlled.

Limited Partnership

A business structure in which one or more of the owners may be granted limited liability as long as one partner is designated as a general partner with unlimited liability.

General Partnership

A business structure in which the business owners share the management and risk of the business.

Limited Liability

A legal structure that protects company owners' personal assets from business debts and liabilities.