Homework Answers
Profits will decrease, since fixed costs under automation will be high and any point below the indifference point will produce lower profits
Degree of Operating Leverage = Contribution Margin/Net Operating Income
= 750,000/400,000
= 1.875 times
Increase in Operating Income = % increase in sales*Degree of operating leverage
=20%*1.875
= 37.5%
DOL = 750,000/500,000 = 1.5
i.e. Decrease the operating leverage by (1.875-1.5) = 0.375
Add Answer to:
A company has calculated its indifference point to be 100.000 units for deciding on whether to...
WESTERWHEAT Contribution Margin Income Statement 150,000 units sold Total Per Unit Percent Sales revenue $1,950,000 $13.00...
WESTERWHEAT Contribution Margin Income Statement 150,000 units sold Total Per Unit Percent Sales revenue $1,950,000 $13.00 1008 Less: Variable 1,200,000 8.00 620 costs Contribution $ 750,000 $ 5.00 388 Less: Fixed costs 350,000 Net operating $ 400,000 income Knowledge Check 01 What is Westerwheat's degree of operating leverage? 2143 4.875 1.875 3.000 Knowledge Check O2 A 20 percent increase in sales revenue will increase net operating Income by 42.86% 97.50% 60.00% 37.50% Knowledge Check 03 Decreasing fixed costs by $100,000...
A company has calculated its indifference point to be 100,000 units for deciding on whether to...
A company has calculated its indifference point to be 100,000 units for deciding on whether to automate its manufacturing process. What will happen to profits if the company does automate and sales volume is only 90,000 units? Multiple Choice Ο Profits remain the same Ο Profits will decrease Ο Profits will increase
please help me with this thank you! er 18: Homework A HUDSON CO. Contribution Margin Income...
please help me with this
thank you!
er 18: Homework A HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,500 units at $225 each) Variable costs (10,500 units at $180 each) Contribution margin Fixed costs Pretax income $2,362,500 1,890,000 $ 472,50€ 315, eee $ 157,500 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 4% in 2020, what will be the company's pretax income? 3. Assume sales for 2020...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units)...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units) Variable expenses Contribution margin Fixed expenses Net operating income 45, ose 31.500 13,500 8.640 4,860 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? The new sales volume is within the relevant range. Net operating income Required information (The following information applies to the questions displayed below.) Income...
Omar Company prepared the following contribution format income statement based on 100,000 units of sales. Sales............
Omar Company prepared the following contribution format income statement based on 100,000 units of sales. Sales......... ...$3,000,000 Variable expenses. .1,800,000 Contribution margin... ..1,200,000 Fixed expenses.... ...900,000 Net operating income... 300,000 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net...
Company A is a manufacturer with sales of $3,500,000 and a 50% contribution margin. Its fixed...
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...
OSLO COMPANY PREPARED THE FOLLOWING CONTRIBUTION FORMAT INCOME STATEMENT BASED ON SALES VOLUME OF $1,000 UNITS...
OSLO COMPANY PREPARED THE FOLLOWING CONTRIBUTION FORMAT INCOME STATEMENT BASED ON SALES VOLUME OF $1,000 UNITS ( THE RELEVANT RANGE OF PRODUCTION IS 500 UNITES TO 1500 UNITS. SALES $20,000 VARIABLE EXPENSES $12,000 CONTRIBUTION MARGIN $8,000 FIXED EXPNSES $6,000 NET OPERATING INCOME $2,000 1. WHAT IS THE CONTRIBUTION MARGIN PER UNIT? 2. WHAT IS THE CONTRIBUTION MARGIN RATIO? 3. WHAT IS THE VARIABLE EXPENSE RATIO? 4. IF SALES INCREASE TO 1,001 UNITS, WHAT WOULD BE THE INCREASE IN NET OPERATING...
Company A is a manufacturer with sales of $4,000,000 and a 60% contribution margin. Its fixed costs equal $1,800,000. C...
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...
Required information [The following information applies to the questions displayed below) $ Income Statement Sales (1,units)...
Required information [The following information applies to the questions displayed below) $ Income Statement Sales (1,units) Variable expenses Contribution margin Fixed expenses Net operating income 45, eee 31,5ee 13,500 8,640 4.860 13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? The increase in sales is within the relevant range. (Round your intermediate calculations and final answer to 2 decimal places.) Increase in net operating income
Following is the income statement for Morning Mufflers for the month of June 2018: B (Click...
Following is the income statement for Morning Mufflers for the month of June 2018: B (Click the icon to view the contribution margin income statement.) i Data Table þund 1 Requirements of op d in Iculati Morning Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (200 units x $200) $ 40,000 Variable Costs (200 units x $50) 10,000 Contribution Margin 30,000 Fixed Costs 11,000 $ 19,000 Operating Income 1. Calculate the degree of operating leverage....
WESTERWHEAT Contribution Margin Income Statement 150,000 units sold Total Per Unit Percent Sales revenue $1,950,000 $13.00 1008 Less: Variable 1,200,000 8.00 620 costs Contribution $ 750,000 $ 5.00 388 Less: Fixed costs 350,000 Net operating $ 400,000 income Knowledge Check 01 What is Westerwheat's degree of operating leverage? 2143 4.875 1.875 3.000 Knowledge Check O2 A 20 percent increase in sales revenue will increase net operating Income by 42.86% 97.50% 60.00% 37.50% Knowledge Check 03 Decreasing fixed costs by $100,000...
A company has calculated its indifference point to be 100,000 units for deciding on whether to automate its manufacturing process. What will happen to profits if the company does automate and sales volume is only 90,000 units? Multiple Choice Ο Profits remain the same Ο Profits will decrease Ο Profits will increase
please help me with this
thank you!
er 18: Homework A HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,500 units at $225 each) Variable costs (10,500 units at $180 each) Contribution margin Fixed costs Pretax income $2,362,500 1,890,000 $ 472,50€ 315, eee $ 157,500 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 4% in 2020, what will be the company's pretax income? 3. Assume sales for 2020...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units) Variable expenses Contribution margin Fixed expenses Net operating income 45, ose 31.500 13,500 8.640 4,860 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? The new sales volume is within the relevant range. Net operating income Required information (The following information applies to the questions displayed below.) Income...
Omar Company prepared the following contribution format income statement based on 100,000 units of sales. Sales......... ...$3,000,000 Variable expenses. .1,800,000 Contribution margin... ..1,200,000 Fixed expenses.... ...900,000 Net operating income... 300,000 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net...
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...
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...
Required information [The following information applies to the questions displayed below) $ Income Statement Sales (1,units) Variable expenses Contribution margin Fixed expenses Net operating income 45, eee 31,5ee 13,500 8,640 4.860 13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? The increase in sales is within the relevant range. (Round your intermediate calculations and final answer to 2 decimal places.) Increase in net operating income
Following is the income statement for Morning Mufflers for the month of June 2018: B (Click the icon to view the contribution margin income statement.) i Data Table þund 1 Requirements of op d in Iculati Morning Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (200 units x $200) $ 40,000 Variable Costs (200 units x $50) 10,000 Contribution Margin 30,000 Fixed Costs 11,000 $ 19,000 Operating Income 1. Calculate the degree of operating leverage....
Most questions answered within 3 hours.
-
•Describe the basic structure of collagen monomers •Explain how
amino acid composition of collagen contributes to...
asked 41 minutes ago -
Compute the sample correlation coefficient
r for each of the following data sets.
(Use 3 decimal...
asked 1 hour ago -
5a. What are the advantages and disadvantages of Proxy ARP?
b. What is the TTL field...
asked 1 hour ago -
An ice cube (density = 900[kg/m3]) with a side length of
2.54[cm] is held by a...
asked 2 hours ago -
would you say that leaders in the international context are born
or made? That is, can...
asked 3 hours ago -
Instructions
Read the Digital Trends article "Solid state drives are speedier
than hard disk drives. Are...
asked 3 hours ago -
A multiple-choice test consists of 29 questions with possible
answers of a, b, c, d. Estimate...
asked 3 hours ago -
Question 1: Ethanol is the active ingredient of alcoholic
beverages. It is also s a possible...
asked 3 hours ago -
In the process of a simple distillation, the substances in the
still head tube are in...
asked 3 hours ago -
In a normal distribution with mean 3 and standard deviation of
7, what are the upper...
asked 3 hours ago -
A big block stone with mass M explodes and splits in two pieces
with mass 0.40M...
asked 3 hours ago -
Discuss the role of women in the late 19th century. In what ways
were the roles,...
asked 3 hours ago