Cleaning Care Inc

question 54

Multiple Choice

Cleaning Care Inc. expects to sell 10,000 mops. Fixed costs (for the year) are expected to be $10,000, unit sales price is expected to be $12, and unit variable costs are budgeted at $7.

Cleaning Care's margin of safety ratio (MOS %) is:

• A) 20%.
• B) 40%.
• C) 80%.
• D) 85%.
• E) 90%.

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Definitions:

Inventory Turnover

A metric indicating how many times a company's inventory is sold and replaced over a period, measuring efficiency in managing inventory.

Times Interest Earned

Times Interest Earned is a financial ratio that measures a company's ability to meet its debt obligations based on its operating income.

Debt to Assets Ratio

A financial ratio that indicates the percentage of a company's assets financed through debt, measuring financial leverage.

Current Ratio

A liquidity ratio measuring a company’s ability to pay short-term obligations with its short-term assets.