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Fast as Lightning is an oil change service drive-through that charges each customer $24.00 for...

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Accounting

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 $15.00 per oil and filter change. Monthly fixed costs are $44,000; current sales are 8,000 services. (8 Marks)

a. Compute the breakeven sales in units.

b. Compute the margin of safety in units and sales dollars.

c. Compute the margin of safety as a percentage.

d. Compute the operating leverage factor.

e. Compute the percentage of operating income decline if sales fall by 18%.

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