The margin of safety shows how far sales can fall below the planned level of sales before losses occur.

Name: The margin of safety shows how far sales can fall below the planned level of sales before losses occur.
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Question

Quizplus · Accepted Answer

The margin of safety is defined as the difference between actual or expected sales and the break-even point. It represents the amount of sales that can be lost before a company incurs a loss. Therefore, a higher margin of safety indicates a lower level of risk for a business.

The Margin of Safety Shows How Far Sales Can Fall