The amount of money by which the total revenues exceed the breakeven revenues is classified as _________?
Correct answer: A. margin of safety
- A. margin of safety
- B. margin of profit
- C. margin of loss
- D. margin of income
Explanation
Margin of safety is the excess of actual or expected revenue over break-even revenue. It shows how far sales can fall before the business reaches the no-profit, no-loss point.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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