If Sales Remain the Same and the Margin of Safety

question 59

Multiple Choice

If sales remain the same and the margin of safety increases, which of the following is true?

• A) The break-even point has decreased.
• B) The common fixed costs have increased.
• C) The break-even point has remained constant.
• D) Variable costs have increased.
• E) ​None of these choices are correct.

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Definitions:

Breach Of Contract

The violation of a binding agreement between two or more parties by failing to perform any term of the contract without a legitimate legal excuse.

Legal Position

The status, rights, and obligations of an entity or individual according to the law.

Defences

Defences in legal terms refer to arguments and evidence presented by a defendant in a lawsuit to demonstrate why they should not be held liable for the claims brought against them.

Legally Binding Contract

An agreement between parties that has legal force and is enforceable by law, with defined obligations and rights.