Which of the Following Statements Relating to Margin of Safety

question 21

Multiple Choice

Which of the following statements relating to margin of safety is correct?

• A) It is the amount by which sales can decrease before incurring a loss.
• B) It is the excess of actual sales over expected sales.
• C) It is the difference between fixed and variable costs at a given level of production.
• D) It indicates the amount of goods or services which can be safely produced by the business.

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Definitions:

Processing Time

The time taken to complete a particular process, often referred to in computing as the time a system takes to process a specific task.

Replications

Repeating experiments or simulations to obtain a more accurate estimate of the true characteristics of a phenomenon.

Queue Capacity

The maximum number of items or individuals that can wait in line or queue before being serviced or processed.

Work Cycles

A sequence of tasks or operations repeated regularly as part of the workflow within a project or organization.