Unfortunately, you failed to include the table.
Actual Profit (P) is equal to Actual Sales (S) minus Total
Expenses (E). Given that the Margin of Safety percentage (M) of Total Sales is 25%,
we can establish an equation relating the Total Sales, Break-even point and M.
It would be S - $300,000 = 0.25S, since Margin of Safety is equal to Total
Sales minus Break-even point. Solving for S would result to $400,000. Given
that E is equal to 45% of S, E would then be equal to $180,000. Solving for P,
P = $400,000 - $180,000. Therefore, P is equal to $220,000.
When a company owns between 20% and 50% of stock in another company as a long term investment, they would use the Equity method.
<h3>What is the equity method?</h3>
This is a method of recording the affairs of a company by the another company when that company owns between 20% and 50% of the subsidiary.
This method assumes that the company that owns between 20% and 50%, is very influential and so should record the shares they own to reflect that influence.
Find out more on the equity method at brainly.com/question/26341069.
Answer:
The cost price is the price you buy a product for. You need to compare the cost price to the selling price to know whether you got a profit or loss (did you make money or did you not).
If you don't know the cost price, you don't know whether you have a profit or loss. Of course everyone wants a profit (make money) so to determine a selling price the cost price is important.