The excess of expected sales over the sales level at the break-even point is known as the:
A) Sales turnover.
B) Profit margin.
C) Contribution margin.
D) Relevant range.
E) Margin of safety.

Question

Quizplus · Accepted Answer

Margin of safety is the excess of expected sales over the sales level at the break-even point. It represents the amount by which sales can decrease before the business incurs losses. Choice A, B, C, and D are not correct as they do not represent the excess of expected sales over the sales level at the break-even point.

The Excess of Expected Sales Over the Sales Level at the Break-Even