Needles, Inc

question 91

Multiple Choice

Needles, Inc.was evaluating its margin of safety.Which one of the following is true?

• A)The break-even point is not relevant.
• B)The higher the ratio, the greater the margin of safety.
• C)The higher the dollar amount, the lower the margin of safety.
• D)The higher the ratio, the lower the fixed costs.

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Definitions:

Budgeting

The process of creating a plan to spend your money over a certain period, involving the balancing of income against expenditures.