What is the margin of safety?
A)planned unit sales minus break-even unit sales
B)actual unit sales minus planned unit sales
C)sales price minus fixed expenses
D)equals contribution margin

Question

Quizplus · Accepted Answer

Margin of safety is the difference between actual or projected sales and the break-even point. It represents the amount by which actual or projected sales can decline before the business incurs a loss. Therefore, option A, planned unit sales minus break-even unit sales, is the correct answer.

What Is the Margin of Safety