C openvellumSecure https://www.mathxl.com/Student/Player Test.aspx?testld-181608

Question

C openvellumSecure https://www.mathxl.com/Student/Player Test.aspx?testld-1816086508icenterwin-yes 202 - Routh, Summer 2018 (online) Mitchell Mundy&I; 6/25/18 5:03 PM Test: Exam (Module 3 -ch. 6, 7) Time Limit: 02:00:00 Submit Test This Question: 3 pts 6 of 12 (3 complete) This Test: 43 pts possible expenses are 30% of sales nd have monthly fixed expenses of $21,000. The have monthly target operating income is $7.000. What is the Yellow Company's variable monthly margin of safety in dollars if Yellow Company achieves its operating income goal? OA. $10,000 O B. $70,000 O C. $28,000 O D. $40.000 n Menu ynamic Study Modules your a

Explanation / Answer

Answer is A. $ 10,000 Explanation: Vvariable cost ratio: 30% of sales Contribution margin ratio 70% of sales (100-30)% Target profits earned 7000 Margin of Safety in $: Net target income earned/ Contribution margin ratio 7000 /70% = 10000

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