If sales volume increases and all other factors remain constant, then the:
A) contribution margin ratio will increase.
B) break-even point will decrease.
C) margin of safety will increase.
D) net operating income will decrease.

Question

Quizplus · Accepted Answer

When sales volume increases, the margin of safety increases because it is the difference between actual sales and break-even sales, indicating a larger buffer above the break-even point.

If Sales Volume Increases and All Other Factors Remain Constant