Use the Information Below to Answer the Following Question(s)

question 203

Multiple Choice

Use the information below to answer the following question(s) .
Julia's Catering has a monthly target operating income of $6,000. Variable expenses are 40% of sales and monthly fixed expenses are $3,600.
-What is the monthly margin of safety in dollars if Julia's Catering achieves its operating income goal?

• A) $10,000
• B) $22,000
• C) $16,000
• D) $4,000

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Definitions:

Speculative Bonds

Speculative bonds are high-risk, high-reward investment securities that have a lower credit rating and offer higher yields to compensate for their increased risk.

Fourth Market

Direct trading of stocks and securities among investors or institutions without the use of a broker or public exchange.

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Shares of companies that are traded on a formal exchange, such as the New York Stock Exchange or Nasdaq.

Corporate Ownership

The legal ownership of a corporation, typically represented by shares of stock which provide voting rights and potential dividends to their holders.