If fixed costs go up,and all other factors remain the same,the margin of safety will become larger.

Name: If fixed costs go up,and all other factors remain the same,the margin of safety will become larger.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The margin of safety is the difference between the actual sales volume and the break-even sales volume. If fixed costs go up, the break-even point (the point at which total revenues equal total costs) increases, which means the margin of safety will become smaller, not larger.

If Fixed Costs Go Up,and All Other Factors Remain the Same,the