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Letterman Office Service & Supply (LOSS) sells a variety of office equipment including the Executive office chair. The Executive sells for $200. Expected sales for next year are 5,000 units. LOSS is considering a change in its manufacturing process. The accountants and engineers have developed the following two cost structures: Current Manufacturing System: $140 variable cost per unit and $180,000 in fixed costs. Alternate Manufacturing System: $40 variable cost per unit and $640,000 in fixed costs. What are the margins of safety of the two plans in units and percentage?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9797028

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