Curvy Confections Is Considering Building a New Plant in Europe

Curvy Confections is considering building a new plant in Europe. It predicts sales at the new plant to be 38,000 units at $5.00/unit. Below is a listing of estimated expenses: A European firm was contracted to sell the product and will receive a commission of 20% of the sales price. No U.S. home office expenses will be allocated to the new facility. (Round intermediary dollar calculations to the nearest whole dollar and round percentages to one-tenth percent.)
The margin of safety percentage for Curvy Confections is

A) 47.4%.
B) 41.1%.
C) 152.6%.
D) 21.6%.

Correct Answer:

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