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ACC - Foster?s Repair Shop




Foster?s Repair Shop has a monthly target operating income of $10,500. Variable expenses are 50% of sales, and monthly fixed expenses are $7,000.;Requirements;1. Compute the monthly margin of safety in dollars if the shop achieves its income goal.;2. Express Foster?s margin of safety as a percentage of target sales.;3. What is Foster?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 9%?


Paper#80301 | Written in 18-Jul-2015

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