# 244 stanley 39 s candies is considering building a new plant in europe it predicts s 4308090

244) Stanley's Candies is considering building a new plant in Europe. It predicts sales at the new plant to be 40,000 units at $4.00/unit. Below is a listing of estimated expenses.

CategoryTotal Annual Expenses% of Annual Expense that are Fixed

Materials$20,00010%

Labor$30,00020%

Overhead$50,00040%

Marketing/Admin$10,00060%

A European firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The contribution margin ratio for Stanley's Candies is

A) 157.50%.

B) 57.50%.

C) 42.50%.

D) 52.50%.

245) Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is the monthly margin of safety in dollars if Fancy Furniture achieves its operating income goal?

A) $100,000

B) $900,000

C) $500,000

D) $(300,000)

246) Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is the monthly margin of safety as a percentage of target sales in dollars?

A) 180.00%

B) 25.00%

C) 20.00%

D) 60.00%

247) Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is Fancy Furniture's operating leverage factor at the target level of operating income?

A) 0.20

B) 5.00

C) 6.75

D) 1.25

248) Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

A) $(18,750)

B) $56,250

C) $6,250

D) $31,250

249) Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is the monthly margin of safety as a percentage of target sales in dollars?

A) 20.00%

B) 180.00%

C) 60.00%

D) 25.00%

250) Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is Yellow Company's operating leverage factor at the target level of operating income?

A) 1.25

B) 0.20

C) (3.00)

D) 5.00

251) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is the monthly margin of safety in dollars if the business achieves its operating income goal?

A) $50,000

B) $31,250

C) $68,750

D) $12,500

252) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is the monthly margin of safety as a percentage of target sales in dollars?

A) 137.50%

B) 62.50%

C) 80.00%

D) 166.67%

253) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is Neeley Grocery's operating leverage factor at the target level of operating income?

A) 0.63

B) 2.67

C) 0.40

D) 1.60