The margin of safety:
A) shows how actual sales differ from planned sales
B) is the sales price minus all the fixed expenses
C) is the same as contribution margin
D) equals planned unit sales less break- even unit sales

Question

Quizplus · Accepted Answer

The margin of safety is calculated as the difference between planned or actual sales and break-even sales, indicating how much sales can drop before the company reaches its break-even point.

The Margin of Safety