The margin of safety is:
A) the difference between sales and contribution margin.
B) the same as breakeven point.
C) the amount sales can drop before reaching breakeven point.
D) how far sales must increase to earn a profit.

Question

Quizplus · Accepted Answer

The margin of safety is the difference between actual or budgeted sales and the sales level at the breakeven point, indicating how much sales can drop before the company incurs a loss.

The Margin of Safety Is