Narchie Sells a Single Product for $50

question 38

Multiple Choice

Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.
If Narchie sells 24,000 units, its safety margin will be:

• A) $200,000.
• B) $400,000.
• C) $1,000,000.
• D) $1,200,000.
• E) None of the other answers is correct.