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KidNCo has an actual sales volume of 20,000 units and a breakeven volume of 4,500 units. This results with a margin of safety of 77.5%. This means that:

sales could increase by 77.5% from the actual sales level of 20,000 before the break even volume of sales would be reached.

sales could drop by 77.5% from the actual sales level of 20,000 before the break even volume of sales would be reached

sales could drop by 77.5% from the break even volume of sales before the actual sales level of 20,000 would be reached.

sales could drop by 22.5% from the actual sales level of 20,000 before the break even volume of sales would be reached.

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Which of the following statements best describes a Free Market Economy?

An economy where resources are allocated by a mixture of the private and public sector

None of the above

An economy where resources are allocated by supply and demand i.e. the private sector

100%

An economy where the government allocates resources

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Which of the following would not be an indication of productive inefficiency within an economy?

Idle machinery

Unused factory buildings

High levels of unemployment

Holiday Escape Ltd, a travel agency specialises in flights between holiday destinations. Holiday Escape's fixed costs are $20,000 per month while having a variable cost of $35 per ticket. If Air Fiji charges $800 for a round trip ticket, how many tickets must Holiday Escape sell each month to be able to break even?

100%

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