Exhibit 6-1 Larimer Company Has Monthly Fixed Costs Totaling $90,000 and Variable

Multiple Choice

Exhibit 6-1
Larimer Company has monthly fixed costs totaling $90,000 and variable costs of $5 per unit.Each unit of product is sold for $20.
-Refer to Exhibit 6-1.Assume that Larimer Company expects to sell 5,000 units of product this coming month.What is the margin of safety in sales dollars?

A) $1,000
B) $20,000
C) $260,000
D) $15,000
E) None of the answer choices is correct.