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Adam's Repair Shop has a monthly tasget operating income of $10.000. Vaniable expenses are 50% of sales, and monthly fixed expenses are $7.000. Hint The
Adam's Repair Shop has a monthly tasget operating income of $10.000. Vaniable expenses are 50% of sales, and monthly fixed expenses are $7.000. Hint The contribution margin ratio =100% - Variable expenses percentage of sales Requirement 1. Conpute the monthly margin of salety in dolurs if the shop acherves is income goal Begin by identifying the formula to compute the margin of safety 4. Margen af salety in dotars Requirements 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 fall if sales volume declines by 7%
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