In the Current Year, Becker Sofa Company Expected to Sell

question 4

Multiple Choice

In the current year, Becker Sofa Company expected to sell 12,000 leather sofas. Fixed costs for the year were expected to be $8,400,000; unit sales price was budgeted at $4,600; and unit variable costs were expected to be $2,200.
Becker Sofa Company's margin of safety ratio (MOS %) is (rounded to two decimal places) :

• A) 71.29%.
• B) 77.98%.
• C) 70.83%.
• D) 79.27%.
• E) 73.35%.

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Definitions:

Sue

To take legal action against an individual or entity, typically in civil court, seeking remedy or justice for a wrong perceived to have been committed.

Adhesion Contract

A standardized contract drafted by one party (usually a business) with stronger bargaining power and presented on a "take it or leave it" basis to the other party.

Take-It-Or-Leave-It

A term describing an offer that cannot be negotiated and must either be accepted as is or rejected.

Usurious Loan

A loan given with illegally high-interest rates.