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E7-34A Compute margin of safety and operating leverage (Learning Objective 5) Terry's Towing Service has a monthly target operating income of $30,000. Variable expenses are
E7-34A Compute margin of safety and operating leverage (Learning Objective 5) Terry's Towing Service 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 Terry's margin of safety as a percentage of target sales. 3. What is Terry's operating leverage factor at the target level of operating income? ssume that the company reaches i operating income fall if sales volume declines by 12%
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