Page 23 - F5 Slides 2017-18

The Margin of Safety

The Margin of Safety represents the level by which output can fall
before the organisation makes a loss

Sales Revenue Total Costs

£

Fixed Costs

Margin of safety

Breakeven Budgeted
Output Output

Margin of Safety = Budgeted Output – Breakeven Output X 100%

Budgeted Output
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Chapter 4