Which of the following statements about margin of safety is false? If the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety increases. O b. none of the given answers is false. Oc. Margin of safety measures the difference between budgeted revenues and breakeven revenues. Od Ifonly the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety decreases. Oe. If only the fixed costs increase but the number of units sold and unit selling price and unit variab e cost are all constant, the margin of safety decreases
Which of the following statements about margin of safety is false? If the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety increases. O b. none of the given answers is false. Oc. Margin of safety measures the difference between budgeted revenues and breakeven revenues. Od Ifonly the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety decreases. Oe. If only the fixed costs increase but the number of units sold and unit selling price and unit variab e cost are all constant, the margin of safety decreases
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements about margin of safety is false?
If the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety increases.
O b. none of the given answers is false.
OC Margin of safety measures the difference between budgeted revenues and breakeven revenues.
Od.
If only the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are al constant, the margin of sa ety decreases,
O e.
If only the fixed costs increase but the number of units sold and unit selling price and unit variab e cost are all constant, the margin of safety decreases
Which of the following statements about cperating leverage is false?
The degree of operating everage is higher for companies with higher fixed costs
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