Question $16(3$ points$)$

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Rounding Rules:$$

For units, round up to the next whole unit.$$

Examples:

If your answer is $11,248\mathrm{.}4689$ units, enter $11249$

If your answer is $11,248\mathrm{.}5175$ units, enter $11249$

If your answer is $11,248\mathrm{.}0010$ units, enter $11249$

QUESTION:

Green Acres Inc. $($GAI$)$ manufactures only one model of tractor, the Fluffy.$$It is well known in the tractor industry for its efficient fuel usage as it is partly solar powered.$$ It has become a very popular tractor for those farmers who operate over great distances and cannot always access gasoline. It is a very good product and was recently endorsed by Vince Carter.

This year, GAI expects to make and sell $26,000$ Fluffy's.$$ It is expected to be a very good year due to the government offering interest free loans to any farmer willing to buy a solar powered tractor.$$ Fixed administrative costs are expected to total $$554,000$ and fixed manufacturing costs are expected to total $$342,000.$ Additional financial information relating to this product for this year is provided below.

Financial details per unit:

Selling price$$476$Variable selling cost$24$Variable overhead cost$20$Direct labour cost$94$Direct material cost$233$

Required:$$Calculate GAI's expected margin of safety in units for this year.

Your Answer:

Question $16$ options:

Answer