Cubie Corporation Has Provided the Following Data Concerning Its Only

question 176

Multiple Choice

Cubie Corporation has provided the following data concerning its only product:
What is the margin of safety in dollars?

• A) $1,060,000
• B) $106,000
• C) $954,000
• D) $706,667

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Definitions:

Controllable Margin

The portion of operating income that can be directly controlled or influenced by managers at certain levels of an organization.

Operating Assets

Assets directly involved in the manufacturing or sale of products or services in the normal course of business.

Return on Investment

A measure of the profitability of an investment, calculated as the net profit of the investment divided by the initial cost.

Controllable Fixed Costs

Expenses that can be managed or influenced by decisions made by a company's management, such as advertising expenditures.