Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000.The monthly target operating income is $3,750.What is the monthly margin of safety as a percentage of target sales in dollars?

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A)
Fixed expenses 15,000
Target income 3,750
18,750
Contribution margin 60% (Variable expense of 40%)
Target sales 31,250
Fixed expense 15,000
Contribution margin 60%
Breakeven sales 25,000 (15,000 / .60)
Target sales 31,250
- Breakeven sales 25,000
Margin safety 6,250
Target sales 31,250
Percent of sales 20% (6,250 / 31,250)

Yellow Company's Variable Expenses Are 40% of Sales and Have