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- November 5, 2024 at 12:57 am #713024
The new management accountant of Feather Co wants to introduce cost-volume-profit (CVP) analysis. Which TWO of the following statements regarding cost-volume-profit analysis are true?
1.Changes in the contribution to sales ratio will be proportional to changes in the selling price 2. Increasing fixed costs by 10% will increase the break-even point by more than 10% 3.Increasing fixed costs will lower the margin of safety
4.The margin of safety depends on the sales budget and the break-even salesFound this question but found the answer very confusing, almost all statements seem to be generally true in some way.
1. Assuming variable cost remain constant its true
2. Increase in fixed cost increase bep
3. Reducing mos if safe levels remain same
4. Mos is the difference between budget or actual salesKindly help me out with the correct statements as i find all of them to be correct in their own way
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