Staley CoManufactures Computer Monitors

question 27

Multiple Choice

Staley Co.manufactures computer monitors.The following is a summary of its basic cost and revenue data:
Assume that Staley Co.is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.Staley Co.'s margin of safety ratio if 600 units are sold,is calculated to be:

• A)33.4%.
• B)17.7%.
• C)20.5%.
• D)19.5%.
• E)79.5%.

---

Definitions:

FIFO Perpetual

An inventory valuation method where the first goods purchased are the first ones sold, continuously updated for each sale and purchase.

Inventory Records

Documentation that details the quantity, type, and value of a company's inventory at a particular time.

Inventory Value

The total cost associated with the goods a company intends to sell, calculated at either the cost to produce/buy them or their current market value.

Lower Of Cost

An accounting principle that states inventory should be reported at the lower of its cost or market value.