The margin of safety is the excess of expected sales over breakeven sales.

Name: The margin of safety is the excess of expected sales over breakeven sales.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The margin of safety is the amount by which sales can drop before a company reaches its breakeven point. It is calculated as the difference between expected or budgeted sales and the breakeven point. Therefore, the margin of safety is the excess of expected sales over breakeven sales, making statement A true.

The Margin of Safety Is the Excess of Expected Sales