The following information is required for sub-questions

(a) and (b): The company expects to sell h units in the next accounting period.

(a) The margin of safety is shown on the diagram by:

(i) k

(ii) m

(iii) n

(iv) p

(b) The effect of an increase in fixed costs, with all other costs and revenues remaining the same, will be:
(i) an increase in m (ii) an increase in k (iii) an increase in f (iv) a reduction in p

Transcribed Image Text:

Costs and revenues ($) P Total revenue m Total cost 0 g k -n h Output and sales (units)