Which of the Following Represents the Formula for the Margin

question 117

Multiple Choice

Which of the following represents the formula for the margin of safety?

• A)Total Fixed Costs / Unit Contribution Margin.
• B)(Total Fixed Costs + Target Profit)/ Unit Contribution Margin.
• C)Sales Units - Break-Even Sales Units.
• D)None of the answers is correct.

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Definitions:

Instrument

A legal document formally documenting a transaction or establishing a legal right or obligation.

Claiming Interest

The act of demanding a payment or compensation for the use of one's money or property, especially in legal or financial transactions.

Making Payments

The act of transferring money or its equivalent to another party as fulfillment of an obligation, such as repaying a loan or settling a bill.

Account Orders

Instructions to buy or sell securities or commodities that are given to a brokerage firm for execution.