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Question - Margin of Safety - Yellow Sticker Company's variable expenses are 40% of sales. The company has monthly fixed expenses of $15,000 and sells each unit for $0.50. The monthly target operating income is $9,000.
Required -
a. What is the monthly margin of safety in dollars if Yellow Sticker Company achieves its operating income goal?
b. What is the monthly margin of safety in units if Yellow Sticker Company achieves its operating income goal?
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