Ask Question
16 December, 17:27

The margin of safety is: (Check all that apply.) the difference between expected sales and break-even sales divided by expected sales. adequate if greater than 15% to 20%. the amount sales can drop before the company incurs a loss. always expressed as a dollar amount (not in units or percentages).

+2
Answers (1)
  1. 16 December, 17:38
    0
    Only the following Apply:

    1. the difference between expected sales and break-even sales divided by expected sales.

    2. the amount sales can drop before the company incurs a loss.

    Explanation:

    Margin of safety can be expressed in Percentage, Dollars or Units. It is the amount by which sales may fall before making a loss.

    Margin of safety : Percentage

    Margin of Safety = (Expected Sales - Break Even Sales) / Expected Sales

    Margin of safety : Dollars

    Margin of Safety = Expected Revenue - Break Even Revenue

    Margin of safety : Units

    Margin of Safety = Expected Sales units - Break Even Sales units

    Lastly

    Adequate Margin of Safety is Entity Specific and there are no strict parameters to it.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The margin of safety is: (Check all that apply.) the difference between expected sales and break-even sales divided by expected sales. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers