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

question 102

Multiple Choice

Wetzel Company has variable costs of $5 per unit and a selling price of $10 per unit.Fixed costs are $200,000.Planned unit sales for 2015 are 45,000 units.Actual unit sales for 2014 were 42,000.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

Comprehend the process of budgeting for labor and manufacturing overhead costs.

Prepare comprehensive sales budgets, incorporating sales mix and price changes.

Understand the importance of maintaining inventories at desired levels as part of the budgeting process.

Understand the concept of counterfactual thinking and its impact on emotions and decisions.

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Definitions:

Industrial Development

The process of establishing and growing industries in a region, often leading to economic growth and societal changes.

Trust Organization

An arrangement whereby assets are managed by one party for the benefit of another, often used in business to monopolize industries and markets.

Textiles

Materials or fabrics made from weaving, knitting, or felting fibers, used in the production of clothing, furniture, and other goods.

Machine Tools

Machines used for shaping or machining metal or other rigid materials, typically by cutting, boring, grinding, or shearing.