Compute margin of safety and operating leverage (Learning Objective 5)
Tom’s Repair Shop has a monthly target operating income of $30,000. Variable expenses
are 40% of sales, and monthly fixed expenses are $7,500.
Requirements
1. Compute the monthly margin of safety in dollars if the shop achieves its income goal.
2. Express Tom’s margin of safety as a percentage of target sales.
3. What is Tom’s operating leverage factor at the target level of operating income?
4. Assume that the company reaches its target. By what percentage will the company’s
operating income fall if sales volume declines by 12%
Answers: 1
Geography, 23.06.2019 04:31
Which of the following events did not occur as a result of china’s open-door policy? a. trade between japan and china was encouraged. b. all countries were given equal access to chinese ports. c. foreign influence in china increased. d. the influence of the communist party weakened.
Answers: 1
Geography, 23.06.2019 07:40
Which of the following types of nonrenewable fuel sources requires the storage of radioactive waste? a. coal b. nuclear c. solar d. oil
Answers: 1
Geography, 24.06.2019 01:00
The percentage of people in the united states engaged in agriculture in 2000 was approximately a. 56% b. 38% c. 21% d. 2%
Answers: 2
Compute margin of safety and operating leverage (Learning Objective 5)
Tom’s Repair Shop has a mont...
Physics, 28.01.2020 16:53
Physics, 28.01.2020 16:53
English, 28.01.2020 16:53
Mathematics, 28.01.2020 16:53
Mathematics, 28.01.2020 16:53
English, 28.01.2020 16:53
History, 28.01.2020 16:53
English, 28.01.2020 16:53
History, 28.01.2020 16:53