Fast as Lightning is an oil change service drive-through that charges each customer $24.00 for an oil and filter change service. Fast as Lightning has found that it costs its business $16.00 per oil and filter change. Monthly fixed costs are $44,000; current sales are 8,000 services.
a. Compute the breakeven sales in units.
b. Compute Fast as Lightning's margin of safety in units and sales dollars.
c. Compute Fast as Lightning's margin of safety as a percentage.
d. Compute Fast as Lightning's operating leverage factor.
e. Compute Fast as Lightning's % of operating income decline if sales fall by 18%.

Question

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The Answer of Fast as Lightning is an oil change service drive-through that charges each customer $24.00 for an oil and filter change service. Fast as Lightning has found that it costs its business $16.00 per oil and filter change. Monthly fixed costs are $44,000; current sales are 8,000 services.
a. Compute the breakeven sales in units.
b. Compute Fast as Lightning's margin of safety in units and sales dollars.
c. Compute Fast as Lightning's margin of safety as a percentage.
d. Compute Fast as Lightning's operating leverage factor.
e. Compute Fast as Lightning's % of operating income decline if sales fall by 18%.

Fast as Lightning Is an Oil Change Service Drive-Through That