Notes - Lecture 3.2.3 PDF

The margin of safety in dollars is the excess of budgeted or actual sales over the break-even volume of sales. Margin of safety in dollars is calculated as total sales minus break-even sales. Margin of safety in units is calculated as margin of safety in dollars divided by the selling price per unit.

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Notes - Lecture 3.2.3 PDF

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Margin of Safety in Dollars

The margin of safety in dollars is the excess of budgeted (or actual) sales over the break-
even volume of sales.

Margin of safety in dollars = Total sales - Break-even sales

1
Margin of Safety in Units

Margin of Safety in Units = Margin of Safety in Dollars/Selling price per unit

Exercises: 5-8, 5-18 (4), 5-27 (2b)

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Notes - Lecture 3.2.3 PDF

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Notes - Lecture 3.2.3 PDF

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Margin of Safety in Dollars

Margin of safety in dollars = Total sales - Break-even sales

Margin of Safety in Units = Margin of Safety in Dollars/Selling price per unit

Exercises: 5-8, 5-18 (4), 5-27 (2b)

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