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.

---

Definitions:

Ethological Perspective

A viewpoint in psychology that emphasizes the biological and evolutionary basis for behavior, focusing on how behavior adapts and evolves in natural contexts.

Cognitive Equilibrium

A state of mental balance in which a person's existing knowledge, beliefs, and skills are consistent with their experiences and information from the environment.

Schemas

Mental frameworks that help individuals organize and interpret information, influencing cognition and perception.

Vocabulary Spurt

A rapid increase in the number of words a child learns and begins to use, typically occurring in early childhood development.