The Margin of Safety Is Calculated By

question 118

Multiple Choice

The margin of safety is calculated by:

• A)Dividing fixed costs plus target income by the contribution margin.
• B)Subtracting break-even income from current income.
• C)Subtracting break-even sales from current sales.
• D)Subtracting fixed costs from current contribution margin.

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Definitions:

Tying Strategy

A sales strategy where one product or service is sold conditional on the purchase of another product or service.

Profit-Maximizing Price

The price point at which a company can sell its product or service to achieve the highest possible profit.

High Speed Internet

High speed internet refers to broadband internet service that provides high data rate access to the internet, facilitating faster browsing, streaming, and downloading.

Cable Television

A system for delivering television programming to paying subscribers via radio frequency signals transmitted through coaxial cables or digital light pulses.