Honeysuckle Manufacturing Has the Following Data If Honeysuckle Has Actual Monthly Sales of $1,500,000 and Desires

question 161

Multiple Choice

Honeysuckle Manufacturing has the following data:
$$\begin{array} { | l | r | l | } \hline \text { Selling Price } & \$ 60 & \\\text { Variable manufacturing cost } & \$ 33 & \\\hline \text { Fixed manufacturing cost } & \$ 250,000 & \begin{array} { l } \text { per } \\\text { month }\end{array} \\\hline \begin{array} { l } \text { Variable selling \& administrative } \\\text { costs }\end{array} & \$ 9 & \\\hline \text { Fixed selling \& administrative costs } & \$ 120,000 & \begin{array} { l } \text { per } \\\text { month }\end{array} \\\hline\end{array}$$ If Honeysuckle has actual monthly sales of $1,500,000 and desires an operating profit of $50,000 per month,what is the margin of safety in sales dollars?

• A) $100,000.
• B) $266,667.
• C) $50,000.
• D) $1,130,000.

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Definitions:

Fallacy of Amphiboly

A logical fallacy resulting from ambiguous grammar that leads to a misinterpretation of a statement or argument.

Grammar

The set of structural rules governing the composition of clauses, phrases, and words in a natural language.

Confirmation Bias

The inclination to view new information as support for one's pre-existing opinions or hypotheses.

Fallacy of Popular Appeal

A logical fallacy that argues something is true because it is widely believed or accepted by many people.