Question

The margin of safety is:

the excess of budgeted or actual sales over budgeted or actual variable expenses.

the excess of budgeted or actual sales over budgeted or actual fixed expenses.

the excess of budgeted or actual sales over the break-even volume of sales.

the excess of budgeted net operating income over actual net operating income.

Answer 1

Answer : the excess of budgeted or  actual sales over the the break even volume sales

Explanation :

1.Margin of safety is the excess of actual sales or budgeted sales over the break even sales

2. It is calculated by using the following

margin of safety  = actual sales or budgeted sales - BEP

sales

3. It is useful for mean the Profitability of the business after the break even point sales

4. Higher margin of safety will reduces the risk of business.