The margin of safety is equal to the amount that current or budgeted sales levels exceed which one of the following?
A) Operating profit
B) Break-even sales
C) Fixed costs
D) Net income

Question

Quizplus · Accepted Answer

The margin of safety is calculated by subtracting break-even sales revenue from current or budgeted sales levels. This calculation shows the amount of sales revenues above the breakeven point, or the total number of sales dollars that can be lost before the company begins to lose money.

The Margin of Safety Is Equal to the Amount That