The amount by which actual or expected sales exceeds break-even sales is referred to as
A) contribution margin.
B) unanticipated profit.
C) margin of safety.
D) target net income.

Question

Quizplus · Accepted Answer

Margin of safety is the amount by which actual or expected sales exceed break-even sales. It represents the cushion a business has before it starts incurring losses. Contribution margin is the difference between sales and variable costs, target net income is the amount of profit a business wants to make, and unanticipated profit refers to unexpected profit that exceeds what was forecasted. None of these options accurately describe the concept of the amount by which actual or expected sales exceeds break-even sales.

The Amount by Which Actual or Expected Sales Exceeds Break-Even