Eastwick Produces and Sells Three Products Fixed Costs Total $200,000

question 34

Multiple Choice

Eastwick produces and sells three products.Last month's results are as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { P1 } & \text { P2 } & \text { P3 } \\\hline \text { Revenues } & \$ 100,000 & \$ 200,000 & \$ 200,000 \\\hline \text { Variable costs } & 40,000 & 140,000 & 80,000 \\\hline\end{array}$$
Fixed costs total $200,000.What is Eastwick's margin of safety? (Assume the current product mix. )

• A) $83,333.
• B) $40,000.
• C) $460,000.
• D) $115,385.

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