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LO 3.5Explain margin of safety and why it is an important measurement for managers.

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Step-by-step explanation:

The safety margin can be defined as the difference between actual sales and breakeven sales. That is, it is all billing that exceeds breakeven billing. So having a safety margin means having results above break-even point, ie profit.

It is important for managers to use the safety margin as an aid in the decision-making process, as through this it is possible to establish sales decrease provisions before a project is no longer useful in the company.

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