1. Winners Games reported sales of $72,000 and net income totaling $12,000 during the year. It’s selling price is $6 per unit, its variable cost is $2 per unit, and its total fixed costs are $36,000. How much is the projected margin of safety?
a. $54,000
b. $66,000
c. $12,000
d. $18,000
2. What is a relevant cost?
a. It is a sunk cost.
b. It is a past cost.
c. It is a cost that differ across alternatives.
d. It is an opportunity cost.
3. True or False
1. A sunk cost is the potential benefit that may be obtained by following an alternative course of action.