Which of the following is defined as the amount by which a company's sales can decline before operating losses are incurred?
A) Contribution margin.
B) Degree of operating leverage.
C) Margin of safety.
D) Contribution margin ratio.

Question

Quizplus · Accepted Answer

Margin of safety is defined as the amount by which a company's actual or projected sales exceed the break-even point or the amount of sales necessary to cover all costs. In other words, it is the amount of sales that can decline before the company starts incurring operating losses.

Which of the Following Is Defined as the Amount by Which