ECONOMICS

Detailed explanation-1: -The margin of safety is the difference between the amount of expected profitability and the break-even point. The margin of safety formula is equal to current sales minus the breakeven point, divided by current sales.

Detailed explanation-2: -To work out the production level you need to make a profit, you can also work out the margin of safety in units. You still take the break-even point from the current sales figure, but then divide the sum of that by the selling price per unit.

Detailed explanation-3: -Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. In other words, when the market price of a security is significantly below your estimation of its intrinsic value, the difference is the margin of safety.

Detailed explanation-4: -BEP describes the sales amount where the business earns zero level of profits. On the other hand, MOS determines the amount of profits that the business can assure at a point after the breakeven point.