Page 93 - 5.2 i. Manac Costing ITC Summarised Notes
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ITC EXAM PREP
Margin of Safety
The amount by which sales can decrease before a loss occurs.
Margin of safety (units) = Sales – Breakeven Sales
• Number of units sales can fall by without a loss being incurred
Margin of safety (%) = Sales – Breakeven Sales / Sales
• % sales can fall by without a loss being incurred
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