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Randall's Repair Shop has a monthly target profit of $19,500. Variable costs are 75% of sales, and monthly fixed costs are $13,000. Requirements 1. Compute

Randall's Repair Shop has a monthly target profit of $19,500. Variable costs are 75% of sales, and monthly fixed costs are $13,000.

Requirements

1. Compute the monthly margin of safety in dollars if the shop achieves its income goal.

2. Express Randall's margin of safety as a percentage of target sales.

3. Why would Randall's management want to know the shop's margin of safety?

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