Gould Enterprises Sells Computer Disks for $1

question 167

Multiple Choice

Gould Enterprises sells computer disks for $1.50 per disk. Unit variable expenses total $0.90. The breakeven point in units is 3,000 and expected sales in units are 4,300. What is the margin of safety in dollars?

• A)$4,500
• B)$1,950
• C)$3,870
• D)$6,450

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Definitions:

Stagflation

A situation where an economy experiences stagnant growth, high unemployment, and high inflation simultaneously, presenting a challenge to economic policy.

Actual Price Level

The current level of prices in the economy for goods and services, reflecting inflation or deflation in the market.

Real Wages

The purchasing power of wages, taking into account the effects of inflation or deflation, representing the quantity of goods and services wages can buy.

Cyclical Unemployment

Unemployment that rises during economic downturns and falls when the economy improves, directly related to cycles of economic upturn and downturn.