Blended Service System ...
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Accounting
| Blended Service | ||
| System | ||
| Sales | $3,020,000 | |
| Variable costs | 1,812,000 | |
| Contribution margin | $1,208,000 | |
| Fixed costs | 604,000 | |
| Net Income | $604,000 | |
| Operating leverage | 2 | |
| if sales increased by $302,000 net income would increase by | 20% | |
| Using the margin of safety ratio, how large of a decline in sales could this option sustain before operating at a loss? | ||
| (Round margin of safety ratio to 2 decimal places, e.g. 0.25 and decline in sales to 0 decimal places, e.g. 125.) | ||
| Margin of safety ratio | ||
| Decline in sales | % |
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