Yellow Company's Variable Expenses Are 30% of Sales and Have

question 152

Multiple Choice

Yellow Company's variable expenses are 30% of sales and have monthly fixed expenses of $21,000. The monthly target operating income is $4200. What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

• A)$25,200
• B)$66,000
• C)$6000
• D)$36,000

---

Definitions:

Terminal Moraine

A terminal moraine is an accumulation of debris and sediment formed at the snout (end point) of a glacier, marking the furthest advance of the glacier.

Cirque

A mountain basin with steep sides and a bowl-like shape, formed by glacier activity, frequently hosting a small lake.

Moraine

A mass of rocks and sediment carried down and deposited by a glacier, typically as ridges at its edges or extremity.

Valley

A low area between hills or mountains, often with a river or stream flowing through it.