Which one of the following statements is correct? In marginal costing, the margin of safety is:

Question

Quizplus · Accepted Answer

Marginal costing defines Margin of Safety as the amount by which sales can fall below the break-even point, and refers to the excess of actual or budgeted sales over the break-even sales. Therefore, option A is the correct statement. Option B is incorrect because it refers to the variance between planned and actual sales, not the margin of safety. Option C is the formula for calculating the break-even point, not the margin of safety. Option D is incorrect because it refers to total profit, not the margin of safety.

Which One of the Following Statements Is Correct? in Marginal