Creative Cravat Neckties Sell for $75 Each

question 95

Multiple Choice

Creative Cravat neckties sell for $75 each. Unit variable expenses total $50. The break-even sales in units is 4,000 and budgeted sales in units is 9,600. What is the margin of safety in dollars?

• A) $280,000
• B) $420,000
• C) $300,000
• D) $100,000

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Definitions:

Modified Approach

Modified Approach is a method in governmental accounting allowing certain assets to be reported at historical cost, exempt from the regular depreciation accounting if they are maintained at predefined condition levels.

Infrastructure Assets

Long-term physical assets that are critical for providing public services, including roads, bridges, and water supply systems.

Maintenance Costs

Expenses incurred to keep an asset in working order or restore it to proper condition; does not improve upon the original asset.

Government-Wide Financial Statements

Comprehensive reports that provide an overview of a government entity’s financial activities and balances, including both governmental and business-type activities.