Wang CoManufactures and Sells a Single Product That Sells for $450

question 246

Multiple Choice

Wang Co.manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit.Annual fixed costs are $800,000.Current sales volume is $4,200,000.Compute the current margin of safety in dollars.

• A)$1,560,000.
• B)$2,000,000.
• C)$2,200,000.
• D)$2,895,652.
• E)$2,460,000.

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Definitions:

Ex-Rights

A status of a stock that signifies it is being traded without the right to receive the most recent dividend payment or issuance.

Holder-Of-Record Date

The specified date on which the shareholders of record are entitled to receive a forthcoming dividend or participate in corporate events.

Announcement Date

The specific date on which a company releases significant information to the public, often regarding earnings, product launches, or other major events.

Firm-Commitment Basis

An underwriting process where the underwriter buys the entire issue of securities from the issuer and sells them to investors, assuming full financial risk.