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Compute the monthly margin of safety in dollars

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Reference no: EM13527380

Computing margin of safety

Rodney's Repair Shop has a monthly target operating income of $15,000. Variable costs are 75% of sales, and monthly fixed costs are $10,000.

Requirements

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

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

Reference no: EM13527380

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