Rodneys Repair Shop has a monthly target operating income of $15,000. Variable costs are 75% of sales,

Question:

Rodney’s Repair Shop has a monthly target operating income of $15,000. Variable costs are 75% of sales, and monthly fixed costs are $10,000.
Requirements
1. Compute the monthly margin of safety in dollars if the shop achieves its income goal.
2. Express Rodney’s margin of safety as a percentage of target sales.