Multiple Choice
Which of the following statements regarding the margin of safety is not true?
A) The margin of safety is the mix between fixed and variable costs.
B) The margin of safety indicates how much revenue can decrease before reaching the break-even point.
C) A small margin of safety should motivate managers to reduce costs and increase sales to avoid potential losses.
D) The margin of safety in units is equal to the actual or estimated units of activity minus units at break-even point.
Correct Answer:
Verified
Correct Answer:
Verified
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