Rustic Replicas Is Owned and Operated by a Craftsman Who

question 72

Multiple Choice

Rustic Replicas is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 43 flintlock muskets per month.The cost data for the muskets are as follows: $$\begin{array} { | l | r | } \hline \text { Price per unit } & \$ 750 \\\hline \text { Variable costs per unit } & 480 \\\hline \text { Fixed costs per month } & 8,100 \\\hline\end{array}$$ If Rustic expects to sell 40 units per month,what is his margin of safety expressed in units per month?

• A) 10 units
• B) 30 units
• C) 16 units
• D) 24 units

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Definitions:

Acquisition

The process of obtaining control of another company by purchasing its stock or assets.

Fair Value

The fair market price of an asset, reflecting its current value under normal market conditions.

Excess Land Allocation

The process of assigning a portion of the purchase price of a combined investment in land and building to the land, often when the portion allocated is above the fair value.

Noncontrolling Interest

An ownership interest in a company that is less than 50%, indicating that the holder does not have control over the company's operations.