Southwest Electric Co-Op Has Variable Expenses of 20% of Sales

question 131

Multiple Choice

Southwest Electric Co-op has variable expenses of 20% of sales and monthly fixed expenses of $150,000.The monthly target operating income is $50,000.What is the monthly margin of safety in dollars if Southwest Electric Co-op achieves its operating income goal?

• A)$125,000
• B)$437,500
• C)$250,000
• D)$ 62,500

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Definitions:

RULPA

The Revised Uniform Limited Partnership Act, which is a standardized set of laws to regulate the formation, operation, and dissolution of limited partnerships in the US.

Duty of Care

A legal obligation imposed on an individual to adhere to a standard of reasonable care while performing acts that could foreseeably harm others.

General Partner

A member of a partnership who has unlimited personal liability for the debts of the business and takes part in the management of the partnership.

Learned Helplessness

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed.