The current plans for a product result in a margin of safety of 1,000 units. Will this margin of safety increase or decrease as a result of these scenarios?Breakeven point in units 2,500 units: Expected level of sales 4,200 units
A. Increase the margin of safety
B. Decrease the margin of safety
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Breakeven point in units 3,500 units: Expected level of sales 4,200 units
A. Increase the margin of safety
B. Decrease the margin of safety
An organisation implements efficiency measures which lead to a reduction in both the total fixed costs and the unit variable costs associated with selling Product A.If the organisation makes no change to the selling price of Product A and the sales volume remains constant, what will be the effect on the margin of safety?
A. Increase
B. Decrease
C. No change
D. There is not enough information to answer the question
Which of the below is calculated using the following equation? Fixed costs / Contribution per unit
A. Breakeven point
B. Margin of safety
C. Net profit ratio
D. Total contribution
Which TWO of the following costs are relevant in a decision making process?
A. Sunk costs
B. Opportunity costs
Committed costs
D. Avoidable costs