Operating leverage is a.the difference between sales and variable expense. b.the use of fixed costs to...
Operating leverage is
a.the difference between sales and variable expense.
b.the use of fixed costs to extract higher percentage changes in profits as sales activity changes.
c.the portion of each sales dollar available to cover fixed costs and provide for profit.
d.visually portrays the relationship between profits and units sold.
e.none of these
Homework Answers
b. the use of fixed costs to extract higher percentage changes in profits as sales activity changes.
Degree of operating leverage is calculated as contribution margin divided by operating income.
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Operating leverage is
a.the difference between sales and variable expense.
b.the use of fixed costs to...
Degree of operating leverage Grey Products has fixed operating costs of $389,000, variable operating costs of...
Degree of operating leverage Grey Products has fixed operating costs of $389,000, variable operating costs of $16.19 per unit, and a selling price of $63.43 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 10,000, 12,000, and 14,000 units, respectively. c. With 12,000 units as a base, what are the percentage changes in units sold and EBIT as sales move from the base to the other sales levels used in part (b)? d....
Degree of operating leverage Grey Products has fixed operating costs of $373,000, variable operating costs of...
Degree of operating leverage Grey Products has fixed operating costs of $373,000, variable operating costs of $16.55 per unit, and a selling price of $63.45 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 11,000, 13,000, and 15,000 units, respectively. c. With 13,000 units as a base, what are the percentage changes in units sold and EBIT as sales move from the base to the other sales levels used in part (b)? d....
What ratio indicates the percentage of each sales dollar that is available to cover fixed costs...
What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit
en Parcial Multiple Choice: (22 points) cates the percentage of each sales dollar that is available to cover fixed...
en Parcial Multiple Choice: (22 points) cates the percentage of each sales dollar that is available to cover fixed 1. Which of the fol Which of the following costs is an example of fixed cost a. Hourly wages of machine operators b. Plant manager salary c. Direct materials d.-Direct labor 2. Which ratio indicates the percentage costs and to provide a profit? a. Margin of safety ratio 6. Contribution margin ratio c. Costs and expenses ratio d. Profit ratio 3....
5. Given the following information, what is the degree of operating leverage? Sales: 100 Variable costs:...
5. Given the following information, what is the degree of operating leverage? Sales: 100 Variable costs: 20 Fixed costs:30 6. Given the info above, if sales change 20% how much will operating income change? 7. If the company has $900 in sales and $1,030 in sales in year 2, then operating income will change by what percentage if the DOL is 10?
Sales Level 40,000 Cases Total Fixed Costs Variable Costs Selling Price 110,000 S27/Case S30/Case is the...
Sales Level 40,000 Cases Total Fixed Costs Variable Costs Selling Price 110,000 S27/Case S30/Case is the expected profitloss for the period? Create an Inc Stmt using the full CM format (ignore taxes) Total Dollars UnirBasis 」Percentages SP VC CM FC NT 13. Based on the above Income Statement prepared, what is the current "Operating Leverage" and what dollar amount and percentage increase in profits would be expected with say a 20% increase in unit sales? Show your work and prepare...
Spring Company’s cost structure is dominated by variable costs with a contribution margin ratio of 0.40...
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Given the graphs above, calculate the total fixed costs,variable costs per unit, and sales price...
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The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of...
The Greenback Store’s cost structure is dominated by variable
costs with a contribution margin ratio of 0.40 and fixed costs of
$100,800. Every dollar of sales contributes 40 cents toward fixed
costs and profit. The cost structure of a competitor, One-Mart, is
dominated by fixed costs with a higher contribution margin ratio of
0.70 and fixed costs of $244,800. Every dollar of sales contributes
70 cents toward fixed costs and profit. Both companies have sales
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Cantor Products sells a product for $86. Variable costs per unit are $46, and monthly fixed...
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Degree of operating leverage Grey Products has fixed operating costs of $389,000, variable operating costs of $16.19 per unit, and a selling price of $63.43 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 10,000, 12,000, and 14,000 units, respectively. c. With 12,000 units as a base, what are the percentage changes in units sold and EBIT as sales move from the base to the other sales levels used in part (b)? d....
Degree of operating leverage Grey Products has fixed operating costs of $373,000, variable operating costs of $16.55 per unit, and a selling price of $63.45 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 11,000, 13,000, and 15,000 units, respectively. c. With 13,000 units as a base, what are the percentage changes in units sold and EBIT as sales move from the base to the other sales levels used in part (b)? d....
en Parcial Multiple Choice: (22 points) cates the percentage of each sales dollar that is available to cover fixed 1. Which of the fol Which of the following costs is an example of fixed cost a. Hourly wages of machine operators b. Plant manager salary c. Direct materials d.-Direct labor 2. Which ratio indicates the percentage costs and to provide a profit? a. Margin of safety ratio 6. Contribution margin ratio c. Costs and expenses ratio d. Profit ratio 3....
Sales Level 40,000 Cases Total Fixed Costs Variable Costs Selling Price 110,000 S27/Case S30/Case is the expected profitloss for the period? Create an Inc Stmt using the full CM format (ignore taxes) Total Dollars UnirBasis 」Percentages SP VC CM FC NT 13. Based on the above Income Statement prepared, what is the current "Operating Leverage" and what dollar amount and percentage increase in profits would be expected with say a 20% increase in unit sales? Show your work and prepare...
The Greenback Store’s cost structure is dominated by variable
costs with a contribution margin ratio of 0.40 and fixed costs of
$100,800. Every dollar of sales contributes 40 cents toward fixed
costs and profit. The cost structure of a competitor, One-Mart, is
dominated by fixed costs with a higher contribution margin ratio of
0.70 and fixed costs of $244,800. Every dollar of sales contributes
70 cents toward fixed costs and profit. Both companies have sales
of $480,000 for the month....
Cantor Products sells a product for $86. Variable costs per unit are $46, and monthly fixed costs are $120,000. a. What is the break-even point in units? Break-Even Point 2,609 units b. What unit sales would be required to earn a target profit of $328,000? Total Required Sales units c. Assume they achieve the level of sales required in part b, what is the degree of operating leverage? (Round your answer to 3 decimal places.) Degree of Operating Leverage d....
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