If sales volume increases and all other factors remain constant, then the: Multiple Choice contribution margin ratio will increase. break-even point will decrease. margin of safety will increase. net operating income will decrease.

Trusted by Students Everywhere

Google USA

Why Choose Us?

0% AI Guarantee

Human-written only.

24/7 Support

Anytime, anywhere.

Plagiarism Free

100% Original.

Expert Tutors

Masters & PhDs.

100% Confidential

Your privacy matters.

On-Time Delivery

Never miss a deadline.

If sales volume increases and all other factors remain constant, then the: Multiple Choice contribution margin ratio will increase

Management Jun 22, 2021

If sales volume increases and all other factors remain constant, then the:

Multiple Choice

contribution margin ratio will increase.
break-even point will decrease.
margin of safety will increase.
net operating income will decrease.

Expert Solution

As we know that,

Margin of Safety Ratio = (Actual Sales - Breakeven Sales)/Actual Sales

When sales volume increases, the difference between sales and breakeven point sales also increases. As a result, margin of safety will also increase. While Breakeven sales would remain the same because the Contribution margin ratio and the fixed cost would remain the same.

So, the correct answer is option 3d "Margin of safety will increase".

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote