SXF Corporation 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: Area D is best described as
A) Fixed cost
B) Margin of safety
C) Estimated profit at actual volume
D) Breakeven point

Question

Quizplus · Accepted Answer

Area D represents the margin of safety, which is the difference between the actual sales volume and the breakeven point.

SXF Corporation Sells Its Single Product for $14 Per Unit