The Sales and Cost Data for Two Companies in the Transportation

question 104

Multiple Choice

The sales and cost data for two companies in the transportation industry are as follows:X Company's margin of safety ratio (MOS%) (rounded) is:

• A) 7.69%.
• B) 14.29%.
• C) 23.62%.
• D) 47.50%.
• E) 25.00%.

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Definitions:

Direct Materials

Raw materials that are directly attributable and integral to the manufacturing of a product.

Ceramic Tile

A durable, hard surface tile made from clay that has been fired at high temperatures, used for covering floors, walls, or other surfaces.

Administrative Expense

Expenses related to the general operation of a business, including executive salaries, legal and professional fees, and office supplies.

Variable Cost

Costs that fluctuate in direct proportion to changes in levels of output or activity within a business.