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

question 29

Multiple Choice

Use the information below to answer the following question(s) .
Hartville Kitchens has a monthly target operating income of $18,000. Variable expenses are 25% of sales and monthly fixed expenses are $12,000.
-What is the monthly margin of safety in dollars if Hartville Kitchens achieves its operating income goal?

• A) $24,000
• B) $40,000
• C) $56,000
• D) $8,000

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Definitions:

Income Taxes

Taxes levied by governments on the income earned by entities (individuals or corporations), with rates varying by income level.

Part-time Basis

Refers to employment where the worker is not working full-time and usually works fewer hours.

Form W-2

An IRS tax form used in the United States to report wages paid to employees and the taxes withheld from them.

Gross Wages

The total amount of money earned by an employee before any deductions or taxes are taken out.