Chesterfield Corporation Has Been Operating Well Above Its Break-Even Point

question 119

Multiple Choice

Chesterfield Corporation has been operating well above its break-even point.What will happen to Chesterfield's margin of safety if the variable cost per unit increases?

• A) The break-even point would decrease, and the margin of safety would decrease.
• B) The break-even point would decrease, and the margin of safety would increase.
• C) The break-even point would increase, and the margin of safety would decrease.
• D) The break-even point would increase, and the margin of safety would increase.

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Definitions:

Hypo-

Prefix indicating low, under, beneath, down, or less than normal.

Mega-

A prefix in medical terminology indicating enlargement or one million units.

Sym-

A prefix in medical terms denoting "together" or "with," used to describe conditions that involve multiple factors or elements acting together.

An-

Prefix indicating without or lack of.