Henderson Co

question 78

Multiple Choice

Henderson Co.has fixed costs of $36,000 and a contribution margin ratio of 24%.If expected sales are $200,000,what is the margin of safety as a percent of sales?

• A)6%.
• B)25%.
• C)33%.
• D)50%.
• E)75%.

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Definitions:

Unsecured Liabilities

Debts or obligations that do not have specific assets pledged as collateral in case of default.

Federal Income Taxes

Taxes levied by the national government on annual income earned by individuals, corporations, trusts, and other legal entities.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts.

Financial Affairs

The management and analysis of money, investments, and other financial instruments by individuals or entities.