The amount by which a company's sales can decline before losses are incurred is called the:

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The margin of safety is the amount by which sales can decline before the company incurs losses. It is calculated by subtracting the break-even point from the actual sales volume. The contribution margin is the difference between sales revenue and variable costs, the break-even point is the point at which total revenue equals total costs, and the degree of operating leverage measures the sensitivity of a company's earnings to changes in sales volume.

The Amount by Which a Company's Sales Can Decline Before