A Key Reason for Management to Build in a Margin

question 12

Multiple Choice

A key reason for management to build in a margin of safety in its projections is

• A)management can assess if its targets are reasonable in order to cover fixed costs.
• B)if sales do not reach the targeted number, management will not suffer the consequences.
• C)variable costs may fluctuate and this will affect the break-even calculation.
• D)it will show the operating profit if sales are not as expected.

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Definitions:

Efficient

Achieving maximum productivity with minimum wasted effort or expense, often related to processes and systems.

Oxidized

Describes a substance that has lost electrons during a chemical reaction, often associated with the process of oxidation which can result in changes in energy, composition, or color.

Citric Acid Cycle

An array of chemical processes employed by all organisms requiring oxygen to unleash the energy held by oxidizing acetyl-CoA, which comes from carbohydrates, fats, and proteins.

ATP Produced

ATP (adenosine triphosphate) produced refers to the generation of ATP molecules within the cell, which serve as the primary energy currency for various cellular processes.