What Is the Result When Actual Sales Equal Break-Even Sales

question 4

Multiple Choice

What is the result when actual sales equal break-even sales?

• A)the margin of safety is negative
• B)the margin of safety is positive
• C)the margin of safety equals zero
• D)the margin of safety is negative or positive

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Definitions:

Standard Markup Pricing

A pricing strategy where a fixed percentage is added to the cost of a product to set the selling price.

Perishable

Characteristic of a good or product that has a limited shelf life and can deteriorate or expire, such as food or flowers.

Specific Profit Goal

A targeted financial benchmark that a business aims to achieve within a certain period through its operations.

Cost-Plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's production cost.