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

This statement defines the margin of safety correctly. It is a measure of the amount by which sales can drop below the forecasted amount before the business starts incurring losses. It is calculated as the difference between expected or budgeted sales and breakeven sales.

The Margin of Safety Is the Excess of Expected Sales