A decrease in the margin of safety would be caused by a(n):
A) increase in the total fixed costs.
B) increase in total revenue (sales).
C) decrease in the break-even point.
D) decrease in the variable cost per unit.

Question

Quizplus · Accepted Answer

An increase in total fixed costs would increase the break-even point, thus reducing the margin of safety, which is the difference between actual sales and break-even sales.

A Decrease in the Margin of Safety Would Be Caused