Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Adam's Repair Shop has a monthly target operating income of $12,500 Variable expenses are 75% of sales and monthly fixed expenses are $9,500 Read the
Adam's Repair Shop has a monthly target operating income of $12,500 Variable expenses are 75% of sales and monthly fixed expenses are $9,500 Read the requirements Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal Begin by identifying the formula to compute the margin of safety i Requirements Margin of safety in dollars (Round intermediate calculations up to the nearest whole dollar and your final answer to the nearest whole dollar) The margin of safety is $ Requirement 2. Express Adam's margin of safety as a percentage of target sales Begin by identifying the formule to compute the margin of safety as a percentage of target sales - Margin of safety percentage 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal 2. Express Adam's margin of safety as a percentage of target sales. 3. What is Adam'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 fail if sales volume declines by 10%? (Round the percentage to the nearest whole percent.) Print Done The margin of safety percentage is L % of target sales Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the formula to compute the operating leverage factor at the target level of operating income - neratina lavaran factor Choose from any list or enter any number in the input fields and then continue to the next question. Adam's Repair Shop has a monthly target operating income of $12,500 Variable expenses are 75% of sales and monthly fixed expenses are $9.500 Read the requirements The margin of safety is $ Requirement 2. Express Adam's margin of safety as a percentage of target sales Begin by identifying the formula to compute the margin of safety as a percentage of target sales Requirements Margin of safety percentage (Round the percentage to the nearest whole percent.) The margin of safety percentage is % of target sales 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal 2. Express Adam's margin of safety as a percentage of target sales 3. What is Adam's operating leverage factor at the target level of operating income? 4. Assume that the company reaches its farget. By what percentage will the company's operating income fall if sales volume declines by 10%? Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the formula to compute the operating leverage factor at the target level of operating income Operating leverage factor Print Done (Round your answer to two decimal places) The operating leverage factor is Requirement 4. Assume that the company reaches its target. By what percentage will the company's operating income fall if sales volume declines by 10% (Round your answer to two decimal places, XXXX%) If volume decreases 10%, operating income will decrease Choose from any list or enter any number in the input fields and then continue to the next
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started