Increase in variable cost
A)Increases in PV ratio
B)Decreases breakeven point
C)Increases margin of safety
D)None the above

Question

Quizplus · Accepted Answer

An increase in variable cost does not increase the PV (Profit Volume) ratio, decrease the breakeven point, or increase the margin of safety. Instead, it typically has the opposite effects: it can decrease the PV ratio, increase the breakeven point, and decrease the margin of safety, making D the correct choice.

Increase in Variable Cost