Select all of the following that are TRUE.
Question 6 options:
If the fixed expenses increase in a company, and all other factors remain unchanged, then we can expect the margin of safety to decrease.
At a given level of sales, a low contribution margin ratio will result in less net income than a high contribution margin ratio.
If fixed expenses increase by $15,000 per year, then the level of sales needed to break even will also increase by $15,000
Once the break-even point has been reached, increases in contribution margin will be reflected dollar for dollar in increased net income.
In determining contribution margin, all manufacturing costs are deducted.
The margin of safety percentage is equal to the margin of safety in dollars divided by the number of units sold.
