Fancy Furniture Has Variable Expenses of 40% of Sales and Monthly

question 40

Multiple Choice

Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000.The monthly target operating income is $60,000.What is the monthly margin of safety as a percentage of target sales in dollars?

• A)180.00%
• B)25.00%
• C)20.00%
• D)60.00%

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Definitions:

Uncertain Inputs

Factors or variables in a model or process that have unknown or unpredictable values, affecting outcomes and decision-making.

Monte Carlo Sampling

A statistical technique that utilizes random sampling and probability to solve problems that might be deterministic in principle.

Latin Hypercube Sampling

A statistical method used in simulations that stratifies the sample space to ensure a more comprehensive exploration of variables across their entire range of values.

Assumption's Probability Distribution

The theoretical distribution of probabilities assigned to all possible values of a variable based on certain assumptions.