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The margin of safety is a key concept of CVP analysis. Which of the following is not a correct description of margin of safety?
a. It is the amount of sales which may be reduced without resulting into a loss.
b. It is the difference between budgeted sales and break-even sales.
c. It may be expressed in terms of units or peso.
d. Its presence means that the company earns profit.

Respuesta :

Parrain

One thing that is not a correct description of margin of safety is that c. It may be expressed in terms of units or peso.

What is the margin of safety?

This is found by deducting break-even sales from budgeted sales which means that it shows the number of sales that a company can forego and still earn profits.

This means that if this figure is positive, the company would earn profit as they would have beaten their breakeven point. It can be shown in units or currency.

Find out more on the margin of safety at https://brainly.com/question/9797559.

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