Which of the following can be considered a measure of risk in cost-volume-profit analysis?
A) fixed cost
B) margin of safety
C) contribution margin
D) contribution margin ratio

Question

Quizplus · Accepted Answer

Margin of safety is a measure of risk in cost-volume-profit analysis, as it indicates how much sales can decline before the company incurs losses. Fixed cost, contribution margin, and contribution margin ratio are not direct measures of risk, but they are important components in determining a company's break-even point and its potential profitability.

Which of the Following Can Be Considered a Measure of Risk