If variable costs increase,and all other factors remain the same,the margin of safety will become smaller.

Name: If variable costs increase,and all other factors remain the same,the margin of safety will become smaller.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Margin of safety is the difference between actual sales and the break-even point. If variable costs increase, the break-even point goes up, which reduces the margin of safety. Therefore, if all other factors remain the same, the margin of safety will become smaller.

If Variable Costs Increase,and All Other Factors Remain the Same,the