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. Hint: The contribution margin ratio = 100% - Variable expenses percentage of sales. 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. = Margin of safety in dollars Breakeven sales in dollars Contribution margin ratio Fixed expenses Target operating income Target sales in dollars Variable expensesX 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? 4. Assume that the company reaches its target. By what percentage will the company's operating income fall if sales volume declines by 12%? Print Done