Reference no: EM13747725
Honolulu Novelties , Inc. makes two products, Hawaiian Fantasy and Tahitan Joy. Their revenue, cost, and sales data for the two products in 2013 follows :
Selling price per unit : Hawaiian : $15 Tahitan : $100
Variable Expenses Per Unit : Hawaiian : $9 Tahitan : $20
Number of Units Sold Annually : Hawaiian : 20,000 Tahitan : 5,000
Fixed Expenses Total : $475,800
The company has developed a new product called the Samoan Delight. Assume that the company could sell 10,000 units at $48 each. The variable expenses would be $36 each. The company's fixed expenses would not change. What is the company's margin of safety in dollars if the new product is introduced? Assume that the sales mix remains the same.
A) 640,000 B) 120,000 C) 951,600 D) 328,401 E) 731,999
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: Honolulu Novelties , Inc. makes two products, Hawaiian Fantasy and Tahitan Joy. Their revenue, cost, and sales data for the two products in 2013 follows : The company has developed a new product called the Samoan Delight. Assume that the company coul..
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