Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

Which definition correctly describes margin of safety in dollars?

  • Athe amount by which sales revenue exceeds total fixed and variable costs
  • Bthe amount by which sales revenue exceeds total marginal costs
  • Cthe amount by which sales revenue could fall before the break-even point is reached
  • Dthe total fixed costs divided by contribution per unit sold

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