Which of the following would explain why the margin of safety in dollars increased even though totalsales dollars did not change?
A) The breakeven point increased
B) Fixed costs increased
C) The variable cost per unit increased
D) The sales price per unit increased

Question

Quizplus · Accepted Answer

The margin of safety in dollars increases when the difference between actual sales and breakeven sales increases. If total sales dollars did not change, an increase in the sales price per unit would result in fewer units needing to be sold to break even, effectively increasing the margin of safety. The other options would not increase the margin of safety without changing total sales dollars.

Which of the Following Would Explain Why the Margin of Safety