Question
Margin of safety in dollars is Blank______.
Multiple choice question.
net income minus break-even sales
budgeted (or actual) sales minus break-even sales
net income minus fixed costs
break-even sales minus budgeted (or actual) sales
Multiple choice question.
net income minus break-even sales
budgeted (or actual) sales minus break-even sales
net income minus fixed costs
break-even sales minus budgeted (or actual) sales
Answers
GPT-4o mini
The correct answer is:
**budgeted (or actual) sales minus break-even sales**.
The margin of safety in dollars measures how much sales can drop before a business reaches its break-even point (zero profit).
**budgeted (or actual) sales minus break-even sales**.
The margin of safety in dollars measures how much sales can drop before a business reaches its break-even point (zero profit).