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Jakarta Company is a service firm with current service revenue of $300,000 and a 30% contribution margin. Its fixed costs are $45,000. Maldives Company
Jakarta Company is a service firm with current service revenue of $300,000 and a 30% contribution margin. Its fixed costs are $45,000. Maldives Company has current sales of $6,560,000 and a 45% contribution margin. Its fixed costs are $1,918,800. A. What is the margin of safety for Jakarta and Maldives? If required, round final answers to one decimal place. Margin of safety for Jakarta: Margin of safety for Maldives: % % B. Compare the margin of safety in dollars between the two companies. Which is stronger? a. Maldives is stronger because its margin of safety is $2,296,000 whereas Jakarta's is $150,000. b. Maldives is stronger because its margin of safety is $150,000 whereas Jakarta's is $2,296,000. c. Jakarta is stronger because its margin of safety is $2,296,000 whereas Maldives's is $150,000. d. Jakarta is stronger because its margin of safety is $150,000 whereas Maldives's is $2,296,000. C. Compare the margin of safety in percentage between the two companies. Now, which one is stronger? a. Maldives is stronger because its % margin of safety is 35.0% whereas Jakarta's is 50%. b. Maldives is stronger because its % margin of safety is 50% whereas Jakarta's is 35.0%. c. Jakarta is stronger because its % margin of safety is 35.0% whereas Maldives's is 50%. d. Jakarta is stronger because its % margin of safety is 50% whereas Maldives's is 35.0%. d. D. Compute the degree of operating leverage for both companies. If required, round final answers to two decimal places. Operating leverage: Jakarta Maldives
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