The Margin of Safety Would Be Negative If a Company('s)

question 87

Multiple Choice

The margin of safety would be negative if a company('s)

• A)was presently operating at a volume that is below the break-even point.
• B)present fixed costs were less than its contribution margin.
• C)variable costs exceeded its fixed costs.
• D)degree of operating leverage is greater than 100.

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Definitions:

Density-Independent Factor

An environmental factor that affects the size of a population but is not influenced by changes in population density. Compare with density-dependent factor.

Killing Frost

A severe frost event causing significant damage or death to vegetation, effectively ending the growing season for many plants.

Density-Independent Factor

A factor that affects the size of populations regardless of their density, such as weather or natural disasters.

Predation

A biological interaction where a predator organism kills and consumes another organism known as the prey.