Asked by
Gabrielle Sackmann
on Oct 11, 2024Verified
Two companies with the same margin of safety in dollars will also have the same total contribution margin.
Margin of Safety
This metric calculates how much sales can decline before a business reaches its breakeven point.
Total Contribution Margin
The total amount remaining from sales revenue after all variable costs are deducted, used to cover fixed costs and profit.
- Understand the calculation and implications of margin of safety in financial planning.
Verified Answer
NW
Learning Objectives
- Understand the calculation and implications of margin of safety in financial planning.