Which of the following statements about the safety margin is correct?
i.All else being equal,the safety margin is higher when the break even point is lower.ii The safety margin depends on the budgeted revenue
Iii The safety margin is unaffected by fixed cost.

Question

Quizplus · Accepted Answer

The safety margin is higher when the break-even point is lower, and it depends on budgeted revenue. However, it is affected by fixed costs, so statement iii is incorrect.

Which of the Following Statements About the Safety Margin Is