Question

The margin of safety is the excess of: Multiple Choice Fixed costs over expected sales. Break-even sales over expected sales. Expected sales over variable costs. Expected sales over fixed costs. Expected sales over break-even sales.

Answer 1

Answer:

The margin of safety is the excess of Expected sales over break-even sales

Explanation:

Margin of Safety is the amount by which Sales in Dollars or units may fall before a firm makes a loss.

A firm neither makes a loss or a profit at the Break Even Point.

Therefore the Margin of Safety would be the Excess of Expected Sales over the Break Even Sales.