Homework Answers
Leverage factor 5 means. 1% change in sales will lead to 5% change in income.
From the above rule.
Answer is: Sales,100%, income.
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Question 4 1 pts XYZ Company's operating leverage factor is 5. Thus, an 20% change in...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, LO5-5, LO5-7,...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, LO5-5, LO5-7, LO5-8] 3.34 points Morton Company's contribution format income statement for last month is given below $ Sales (40,000 units X $27 per unit) Variable expenses Contribution margin Fixed expenses Net operating income 1,000,000 756.000 324,000 259,200 64,500 References The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to...
E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes...
E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes is a local bakery. Price and cost information follows: $ 14.71 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.24 1.14 0.16 $4,914.80 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $2.10 per cake. Break-Even Point...
E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes...
E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month $ 14.11 2.30 1.14 0.22 $4,493.50 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.20 per cake. Break-Even Point...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, L05-5, LO5-7,...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, L05-5, LO5-7, LO5-8 Morton Company's contribution format income statement for last month is given below: Sales (47,000 units x $25 per unit) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,175,000 822,50 352,50e 282,000 70,500 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions....
degree of operating leverage and financial leverage
reflects last year’s operations:Sales $18,000,000Variable costs 7,000,000Revenue before fixed costs $11,000,000Fixed costs 6,000,000EBIT $5,000,000Interest expense 1,750,000Earnings before taxes (EBT) $3,250,000Taxes 1,250,000Net income $2,000,000REQUIRED:1. At this level of output, what is the degree of operating leverage?2. What is the degree of financial leverage?3. What is the degree of combined leverage?4. If sales increase by 15%, by what percent would EBT (and net income) increase?5. What is your firm’s break-even point in sales dollars?
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, LO5-5, LO5-7,...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, LO5-5, LO5-7, LO5-8] Morton Company’s contribution format income statement for last month is given below: Sales (49,000 units × $28 per unit) $ 1,372,000 Variable expenses 960,400 Contribution margin 411,600 Fixed expenses 329,280 Net operating income $ 82,320 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic...
managerial accounting If the degree of operating leverage is 4, then a one percent change in...
managerial accounting
If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in: OA) net operating income. OB) variable expense. OC) revenue. O D) unit contribution margin.
Problem 2-29 (Algo) Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety (L02-4, LO2-5,...
Problem 2-29 (Algo) Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety (L02-4, LO2-5, LO2-7, LO2-8] Morton Company's contribution format income statement for last month is given below: Sales (48,000 units x $28 per unit) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,344,000 940, 800 403, 200 322,560 $ 80,640 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according...
1. XYZ Company produces and sells a single product. The company's income statement for the most...
1. XYZ Company produces and sells a single product. The company's income statement for the most recent month is given below: Per unit 40 Sales (6,000 units) Variable Expenses Contribution Margin Fixed Expenses Operating Income Total 240,000 144,000 96,000 72,000 24,000 24 16 a. Compute the company's monthly break-even point in units of product. b. Compute the margin of safety of the company as a dollar value and as a percentage. c. Compute the operating leverage of this company. For...
Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in...
Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof dog bed-the Tuff-Pup. Fixed costs are $204,400 per year. The average price for the Tuff-Pup is $36, and the average variable cost is $22 per unit. Currently, Reagan produces and sells 20,000 Tuff-Pups annually. Required: 1. How many Tuff-Pups must be sold to break even? units 2. If Reagan wants to earn $95,900 in profit, how...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, LO5-5, LO5-7, LO5-8] 3.34 points Morton Company's contribution format income statement for last month is given below $ Sales (40,000 units X $27 per unit) Variable expenses Contribution margin Fixed expenses Net operating income 1,000,000 756.000 324,000 259,200 64,500 References The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to...
E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes is a local bakery. Price and cost information follows: $ 14.71 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.24 1.14 0.16 $4,914.80 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $2.10 per cake. Break-Even Point...
E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month $ 14.11 2.30 1.14 0.22 $4,493.50 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.20 per cake. Break-Even Point...
Problem 5-29 Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety [LO5-4, L05-5, LO5-7, LO5-8 Morton Company's contribution format income statement for last month is given below: Sales (47,000 units x $25 per unit) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,175,000 822,50 352,50e 282,000 70,500 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions....
managerial accounting
If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in: OA) net operating income. OB) variable expense. OC) revenue. O D) unit contribution margin.
Problem 2-29 (Algo) Changes in Cost Structure; Break-Even Analysis; Operating Leverage; Margin of Safety (L02-4, LO2-5, LO2-7, LO2-8] Morton Company's contribution format income statement for last month is given below: Sales (48,000 units x $28 per unit) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,344,000 940, 800 403, 200 322,560 $ 80,640 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according...
1. XYZ Company produces and sells a single product. The company's income statement for the most recent month is given below: Per unit 40 Sales (6,000 units) Variable Expenses Contribution Margin Fixed Expenses Operating Income Total 240,000 144,000 96,000 72,000 24,000 24 16 a. Compute the company's monthly break-even point in units of product. b. Compute the margin of safety of the company as a dollar value and as a percentage. c. Compute the operating leverage of this company. For...
Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof dog bed-the Tuff-Pup. Fixed costs are $204,400 per year. The average price for the Tuff-Pup is $36, and the average variable cost is $22 per unit. Currently, Reagan produces and sells 20,000 Tuff-Pups annually. Required: 1. How many Tuff-Pups must be sold to break even? units 2. If Reagan wants to earn $95,900 in profit, how...
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