Winston Company Has Variable Costs of $5 Per Unit and a Selling

question 27

Multiple Choice

Winston Company has variable costs of $5 per unit and a selling price of $10 per unit.Fixed costs are $100,000.Planned unit sales for 2015 are 25,000 units.Actual unit sales for 2014 were 22,000 units.What is the margin of safety in units for 2015?

• A) 2,000 units
• B) 3,000 units
• C) 5,000 units
• D) 7,000 units

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Definitions:

Frederick Macaulay

An economist known for pioneering the concept of bond duration, which measures the sensitivity of a bond's price to changes in interest rates.

Duration Concept

A measure of the sensitivity of a bond's price to changes in interest rates, gauging how much a bond's price will change for a given fluctuation in rates.

Price Volatility

The degree of variation in the price of a financial instrument, commodity, or market index over time, often measured by the standard deviation of returns.

Convexity

This is a measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields, indicating how the duration of a bond changes as the interest rate changes.