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A company can increase its margin of safety by which of the following independent actions?
(a) Increasing sales and production
(b) Raising the selling price per unit
(c) Raising the variable cost per unit
(d) Lowering fixed costs
Suggested Answer: C
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20 comments · newest first
AN
Annabelle
10 months ago
(a), (b), and (d) are the way to go for sure!
WI
Wilson
10 months ago
Lowering fixed costs is a smart move too!
SK
Skye
11 months ago
Wait, raising variable costs? That sounds off.
CA
Carmelina
11 months ago
I think (c) would actually hurt margins, not help.
IN
Inocencia
11 months ago
Definitely (a) and (b) will help!
VE
Veda
11 months ago
I'm a bit uncertain about option (c) since raising variable costs seems counterintuitive to increasing safety margins.
CA
Carli
12 months ago
I practiced a similar question where lowering fixed costs was a clear way to improve margin of safety, so I feel confident about that part.
DE
Devora
12 months ago
I think raising the selling price per unit would also increase the margin of safety, but I can't recall if it affects all scenarios.
HO
Hortencia
12 months ago
I remember that increasing sales and production definitely helps with margin of safety, but I'm not sure about the impact of raising variable costs.
ME
Meghann
1 year ago
I'm pretty confident that the correct answer is (a) and (b) only. Increasing sales and production, and raising the selling price per unit, are the two independent actions that can increase the margin of safety.
PI
Pilar
1 year ago
Okay, I think I've got it. Increasing sales and production, raising the selling price, and lowering fixed costs - that makes sense to me as the best way to increase the margin of safety. I'll go with option (c).
VA
Van
1 year ago
Hmm, I'm a bit confused. Raising the variable cost per unit doesn't seem like it would increase the margin of safety. Let me think this through again carefully.
DE
Dean
1 year ago
This seems straightforward - increasing sales and production, raising the selling price, and lowering fixed costs should all increase the margin of safety. I'll go with option (c) to be safe.
DU
Dudley
1 year ago
I believe lowering fixed costs is crucial for increasing margin of safety.
IS
Isreal
1 year ago
I agree, but raising the selling price per unit can also help.
FL
Fletcher
1 year ago
I think increasing sales and production is key.
KA
Katlyn
1 year ago
Hmm, I think the answer is (C). Increasing sales and production, raising the selling price, and lowering fixed costs - that's the triple play for boosting the margin of safety. Gotta love those economics terms, right?
TA
Tarra
1 year ago
Absolutely, it's all about maximizing profits and minimizing risks in business.
AM
Amber
1 year ago
I agree, (C) is the correct answer. Those actions definitely help increase the margin of safety.
SE
Sena
1 year ago
I agree, (C) is the correct answer. Those actions definitely help increase the margin of safety.