Nickelby sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If Nickelby decreases its sales volume by 10%, what will happen to its margin of safety?
A) It will decrease.
B) It will increase.
C) It will stay the same.
D) Cannot be determined.

Question

Nickelby sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:  If Nickelby decreases its sales volume by 10%, what will happen to its margin of safety?
A) It will decrease. 
B) It will increase. 
C) It will stay the same. 
D) Cannot be determined.

Quizplus · Accepted Answer

The Answer of Nickelby sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:  If Nickelby decreases its sales volume by 10%, what will happen to its margin of safety?
A) It will decrease. 
B) It will increase. 
C) It will stay the same. 
D) Cannot be determined.

Nickelby Sells Its Single Product for $14 Per Unit, and Its