A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2025 · Q271 Mark

What is the correct definition of margin of safety in dollars?

Athe amount by which sales revenue exceeds total fixed and variable costs

Bthe amount by which sales revenue exceeds total marginal costs

Cthe amount by which sales revenue could fall before the break-even point is reached

Dthe total fixed costs divided by contribution per unit sold

✓ Correct answer

C: the amount by which sales revenue could fall before the break-even point is reached

Oracle Prep sorts past-paper questions by topic, so you can drill Traditional costing methods and see which topics are most likely to come up next.

Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2025 Paper 1 Variant 2, question 27.

Questions and mark schemes are from past examination papers and remain the copyright of the exam board. How Oracle Prep builds its content