Sales Variable costs Contribution margin Fixed costs Net income $525000 315000 210000 199500 $10500 $525000 262500...
Company A is a manufacturer with sales of $4,000,000 and a 60% contribution margin. Its fixed costs equal $1,800,000. Company B is a consulting firm with service revenues of $3,900,000 and a 25% contribution margin. Its fixed costs equal $400,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales Complete this question by entering your answers in the tabs below. Company Benefits DOL Compute the degree of operating leverage...
Sales (100,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before taxes Taxes (30°) Net Income $1.000.000 300.000 700,000 200,000 500.000 75.000 425.000 127,500 $297,500 Refer to the table. The degree of operating leverage S Select one: O a. 1.56x Ob.3.33% O c. 2.22% O d. 1.40x Sales (1,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before taxes Taxes (30°) Net Income Shares Outstanding $200,000 110,000 90,000 40.000 50.000 10,000 40,000...
Sales Variable expenses $ 26,000 14,000 Contribution margin Fixed expenses 12,000 7,800 $ 4,200 Net operating income 12 What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage
Company A is a manufacturer with sales of $3,500,000 and a 50% contribution margin. Its fixed costs equal $1,320,000. Company B is a consulting firm with service revenues of $3,600,000 and a 20% contribution margin. Its fixed costs equal $270,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales. Complete this question by entering your answers in the tabs below. DOL Company Benefits Compute the degree of operating leverage...
Serfass Corporation's contribution format income statement for July appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income $369,000 147,600 221,400 55,350 $166,050 The degree of operating leverage is closest to: Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $31,000 and variable expenses of $10,780. Product X96N had sales of $44,000 and variable expenses of $18,470. The fixed expenses of the entire company were $46,060. The break-even point for...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,800 units at $289 each) Variable costs (9,800 units at $210 each) Contribution margin Fixed costs E Pretax income $2,520,000 1,890,000 $ 630,000 420,000 $ 210,000 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 6% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease...
A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales and variable expenses. Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit. Fill in the contribution margin income statement when 730 units are...
Amount Percent of Sales Sales $137,000 100% Variable expenses 54,800 40% Contribution margin 82,200 60% Fixed expenses 17,700 Net Operating $65,200 1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 12% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 12% increase in sales.
Serfass Corporation's contribution format income statement for July appears below. Sales Variable expenses Contribution margin Fixed expenses Net operating income $327,700 180,235 147,465 66,360 $ 81,105 The degree of operating leverage is closest to Multiple Choice
Help S Sales (3,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $60,000 42,000 18,000 13,200 $ 4,800 Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 20% increase in sales is closest to: (Round your intermediate calculations to 1 decimal place.) Multiple Choice 5.33% o 1609 75.00% o 250.00% The magnitude of operating leverage for RBG Corporation is 26 when sales are $180,000 and net income is...