The Following Is Last Month's Contribution Format Income Statement

question 82

Multiple Choice

The following is last month's contribution format income statement: What is the company's margin of safety in dollars?

• A) $100,000.
• B) $250,000.
• C) $600,000.
• D) $1,500,000.

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Definitions:

Marginal Costs

The supplementary cost arising from the manufacture of an extra unit of a good or service.

Variable Inputs

Inputs that can be adjusted in the short term to alter the level of output in the production process.

Marginal Cost Function

A mathematical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Optimal Output

The level of production that maximizes a firm’s profit or minimizes its cost under given conditions.