Question

Curvy Confections is considering building a new plant in Europe. It predicts sales at the new plant to be

42,000

units at

$4.00?/unit.

Below is a listing of estimated? expenses:

Category	Total Annual Expenses	?% of Annual Expense that are Fixed
Materials	$25,000	10?%
Labor	$25,000	20?%
Overhead	$40,000	40?%
?Marketing/Admin	$20,000	60?%

A European firm was contracted to sell the product and will receive a commission of

15?%

of the sales price. No U.S. home office expenses will be allocated to the new facility.? (Round intermediary dollar calculations to the nearest whole dollar and round percentages to

oneminus?tenth

?percent.)

The margin of safety percentage for Curvy Confections is

A.

21.1?%.

B.

40.7?%.

C.

152?%.

D.

70.1?%.

Answer 1