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What is the margin of safety in dollars

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Question - Fire Company is a service firm with current service revenue of $900,000 and a 40% contribution margin. Its fixed costs are $200,000. Ice Company has current sales of $420,000 and a 30% contribution margin. Its fixed costs are $90,000.

Requirements -

1. What is the margin of safety, in dollars and in percentage, for Fire Company? and for Ice Company?

2. What is the degree of operating leverage for Fire Company? and for Ice Company?

Reference no: EM132504759

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