Answer with working notes is given below
The following sales and cost data (in thousands) are for two companies in the transportation Industry:...
The following sales and cost data (in thousands) are for two companies in the transportation industry: Company A Percent of Amount Sales $140,000 100% 70,000 $ 70,000 50% 22,400 $ 47,600 Sales Variable costs Contribution margin Fixed costs Operating profit Company B Percent of Amount Sales $140,000 100% 42,000 $ 98,000 70% 43,400 $ 54,600 30 Required: 1-a. Calculate the degree of operating leverage (DOL) for each company. 1-b. If sales increase from the present level, which company benefits more?...
The following sales and cost data (in thousands) are for two companies in the transportation industry: Company A Percent of Amount Sales $160,000 100% 80,000 50 $ 80,000 28,000 $ 52,000 Sales Variable costs Contribution margin Fixed costs Operating profit Company B Percent of Amount Sales $ 160,000 32,000 $ 128,000 80% 53,000 $ 75,000 100% 20 50% Required: 1-a. Calculate the degree of operating leverage (DOL) for each company. 1-b. If sales increase from the present level, which company...
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...
15 Magic Realm, Inc., has developed a new fantasy board game. The company sold 32,400 games last year at a selling price of $64 per game. Fixed expenses associated with the game total $567,000 per year, and variable expenses are $44 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. oints eBook Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the...
Magic Realm, Inc., has developed a new fantasy board game. The
company sold 16,600 games last year at a selling price of $67 per
game. Fixed expenses associated with the game total $249,000 per
year, and variable expenses are $47 per game. Production of the
game is entrusted to a printing contractor. Variable expenses
consist mostly of payments to this contractor.
Required:
1-a. Prepare a contribution format income statement for the game
last year.
1-b. Compute the degree of operating...
Magic Realm, Inc., has developed a new fantasy board game. The company sold 38,800 games last year at a selling price of $61 per game. Fixed expenses associated with the game total $679,000 per year, and variable expenses are $41 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating...
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Magic Realm, Inc., has developed a new fantasy board game. The company sold 48,000 games last year at a selling price of $69 per game. Fixed expenses associated with the game total $880,000 per year, and variable expenses are $49 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1a. Prepare a contribution format income statement for the game last...
Magic Realm, Inc., has developed a new fantasy board game. The company sold 29,700 games last year at a selling price of $62 per game. Fixed expenses associated with the game total $495,000 per year, and variable expenses are $42 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating...
Magic Realm, Inc., has developed a new fantasy board game. The company sold 9,200 games last year at a selling price of $70 per game. Fixed expenses associated with the game total $92,000 per year, and variable expenses are $50 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format Income statement for the game last year. 1-b. Compute the degree of operating...