SXF 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 SXF increases its sales volume by 10%, what will happen to its margin of safety?

Question

Quizplus · Accepted Answer

An increase in sales volume would shift the total revenue line upward and increase the break-even point. As a result, the margin of safety would increase because the distance between the current sales volume and the break-even point would increase.

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