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.

$($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 formula to compute the margin of safety as a percentage of target sales.

Requirements

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

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

What is Adam's operating leverage factor at the target level of operating income?

Assume that the company reaches its target. By what percentage will the company's operating income fall if sales volume declines by $15\%?$

$($Round the percentage to the nearest whole percent.$)$

The margin of safety percentage is $,\%$ 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.

$,=$ Operating leverage factor

$($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 $15\%?($Round your answer to two decimal places, XX$.$XX$\%.)$

If volume decreases $15\%,$ operating income will decrease

$\%$