If Sales Volume Increases and All Other Factors Remain Constant

question 317

Multiple Choice

If sales volume increases and all other factors remain constant, then the:

• A) contribution margin ratio will increase.
• B) break-even point will decrease.
• C) margin of safety will increase.
• D) net operating income will decrease.

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Definitions:

Sales Contract

A legal agreement between two parties for the exchange of goods, services, or property for payment.

Buyer Payment

The act of providing money or consideration by a buyer to a seller in exchange for goods, services, or property.

Depositary Bank

A financial institution that holds assets or securities in custody for its clients, facilitating trading and safekeeping of these assets.

Payor Bank

The bank on which a check is drawn, responsible for paying the check when it is presented for payment.