Homework Answers
Solution:
|
Waterway Co. $ |
Crane Co. $ |
|
|
Sales |
505,000.00 |
505,000.00 |
|
Less: Variable Cost |
247,000.00 |
49,000.00 |
|
Contribution Margin |
258,000.00 |
456,000.00 |
|
Less: Fixed Cost |
158,000.00 |
356,000.00 |
|
Net Income |
100,000.00 |
100,000.00 |
Solution a1) Calculation of Degree of Operating Leverage for each company
Degree of Operating Leverage = Contribution Margin / Net Income
For Waterway Co. Degree of Operating Leverage = 2,58,000 / 1,00,000 = 2.58 Times
For Crane Co. Degree of Operating Leverage = 4,56,000 / 1,00,000 = 4.56 Times
Solution 1b) Preparation of Variable Costing Income Statement assuming 10% increase in Sales revenue.
New Sales Revenue for Waterway Co. = $505,000 + 10% = $555,000
New Variable Cost for Waterway Co. = $247,000 + 10% = $271,700
New Sales Revenue for Crane Co. = $505,000 + 10% = $555,000
New Variable Cost for Crane Co. = $49,000 + 10% = $53,900
Variable Costing Income Statement
|
Waterway Co. $ |
Crane Co. $ |
|
|
Sales |
555,500.00 |
555,500.00 |
|
Less: Variable Cost |
271,700.00 |
53,900.00 |
|
Contribution Margin |
283,800.00 |
501,600.00 |
|
Less: Fixed Cost |
158,000.00 |
356,000.00 |
|
Net Income |
125,800.00 |
145,600.00 |
Add Answer to:
Current Attempt in Progress The CVP Income statements shown below are available for Waterway Company and...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. Contador Co. $507,000 $507,000 234,000 51,000 273,000 456,000 173,000 356,000 $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong Company...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. Contador Co. $503,000 $503,000 248,000 45,000 255,000 458.000 155,000 358,000 $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong Company...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co....
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Armstrong Co. Sales $495,000 $495,000 Variable costs 239,000 51,000 Contribution margin 256,000 444,000 Fixed costs 156,000 344,000 $100,000 $100,000 Net income (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Contador Company...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $491,000 243,000 248,000 148,000 $100,000 Contador Co. $491,000 51,000 440,000 340,000 $100,000 $100, (al) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co....
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed...
VW POES Current Attempt in Progress The CVP Income statements shown below are available for Armstrong...
VW POES Current Attempt in Progress The CVP Income statements shown below are available for Armstrong company and Contador Company Sales Variable costs Contribution margin Fond costs Net Income Armstrong Co. Contador Co. $499.000 $499.000 242000 46.000 257.000 453,000 157.000 3501000 $100.000 $100.000 rong (1) Compute the degree of operating leverage for each company. Round a Surces 1150 Camous Degree of Operating Leverage Armstrong valuation Contador Assuming that als een by 10% prepare a variable costing income statement for each...
E19.14 (LO 4) The CVP income statements shown below are available for Armstrong Company and Contador...
E19.14 (LO 4) The CVP income statements shown below are available for Armstrong Company and Contador Company Armstrong Co. Contador Co. Sales $500,000 S500,000 Variable costs 240.000 50.000 Contribution margin 260.000 450,000 Fixed costs 160,000 350,000 Net income $100,000 S100,000 Instructions a. Compute the degree of operating leverage for each company and interpret your results. b. Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company c. Discuss how the cost structure of these...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co....
The CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $495,000 $495,000 Variable costs 244,000 55,000 Contribution margin 251,000 440,000 Fixed costs 151,000 340,000 Net income $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong Company...
The CVP income statements shown below are available for XYZ Company and ABC Company. Sales revenue...
The CVP income statements shown below are available for XYZ Company and ABC Company. Sales revenue Variable costs Contribution margin Fixed costs Operating income XYZ Co. $885,000 520,000 365,000 265,000 $100,000 ABC Co. $885,000 292,700 592,300 492,300 $100,000 Calculate each company's degree of operating leverage. (Round answers to 4 decimal places, e.g. 1.2531.) Degree of operating leverage 3.65 XYZ ABC 5.923 Determine which company's cost structure makes it more sensitive to changes in its sales volume. Авст LINK TO TEXT...
Question 6 The CVP income statements shown below are available for XYZ Company and ABC Company...
Question 6 The CVP income statements shown below are available for XYZ Company and ABC Company xYz Co. ABc Co. Sales revenue Variable costs Contribution margin 470,600 Fixed costs Operating income$100,000 $979,500$979,500 508,900 296,200 683,300 70,600$83,300 $100,000 each company's degree of operating leverage. (Round answers to 4 decimal places, e.g. 1.2531 xYz ABC Determine which company's cost structure makes it more sensitive to changes in itses volme Determine the effect on each company's operating income if sales decrease by 10%....
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. Contador Co. $507,000 $507,000 234,000 51,000 273,000 456,000 173,000 356,000 $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong Company...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. Contador Co. $503,000 $503,000 248,000 45,000 255,000 458.000 155,000 358,000 $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong Company...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Armstrong Co. Sales $495,000 $495,000 Variable costs 239,000 51,000 Contribution margin 256,000 444,000 Fixed costs 156,000 344,000 $100,000 $100,000 Net income (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Contador Company...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $491,000 243,000 248,000 148,000 $100,000 Contador Co. $491,000 51,000 440,000 340,000 $100,000 $100, (al) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed...
VW POES Current Attempt in Progress The CVP Income statements shown below are available for Armstrong company and Contador Company Sales Variable costs Contribution margin Fond costs Net Income Armstrong Co. Contador Co. $499.000 $499.000 242000 46.000 257.000 453,000 157.000 3501000 $100.000 $100.000 rong (1) Compute the degree of operating leverage for each company. Round a Surces 1150 Camous Degree of Operating Leverage Armstrong valuation Contador Assuming that als een by 10% prepare a variable costing income statement for each...
E19.14 (LO 4) The CVP income statements shown below are available for Armstrong Company and Contador Company Armstrong Co. Contador Co. Sales $500,000 S500,000 Variable costs 240.000 50.000 Contribution margin 260.000 450,000 Fixed costs 160,000 350,000 Net income $100,000 S100,000 Instructions a. Compute the degree of operating leverage for each company and interpret your results. b. Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company c. Discuss how the cost structure of these...
The CVP income statements shown below are available for XYZ Company and ABC Company. Sales revenue Variable costs Contribution margin Fixed costs Operating income XYZ Co. $885,000 520,000 365,000 265,000 $100,000 ABC Co. $885,000 292,700 592,300 492,300 $100,000 Calculate each company's degree of operating leverage. (Round answers to 4 decimal places, e.g. 1.2531.) Degree of operating leverage 3.65 XYZ ABC 5.923 Determine which company's cost structure makes it more sensitive to changes in its sales volume. Авст LINK TO TEXT...
Question 6 The CVP income statements shown below are available for XYZ Company and ABC Company xYz Co. ABc Co. Sales revenue Variable costs Contribution margin 470,600 Fixed costs Operating income$100,000 $979,500$979,500 508,900 296,200 683,300 70,600$83,300 $100,000 each company's degree of operating leverage. (Round answers to 4 decimal places, e.g. 1.2531 xYz ABC Determine which company's cost structure makes it more sensitive to changes in itses volme Determine the effect on each company's operating income if sales decrease by 10%....
Most questions answered within 3 hours.
-
Your system is rejecting the question am asking which is
preceded by a case study. It...
asked 32 seconds ago -
A member of the volleyball team spikes the ball. During this
process, she changes the velocity...
asked 4 minutes ago -
Are adult gamers less likely to use a gaming console (Xbox,
PlayStation, Wii, etc...) than teen...
asked 57 minutes ago -
The University of
Texas recently reported that 43% of college students aged 18-24
would spend their...
asked 1 hour ago -
The length of stay at a specific emergency department in
Phoenix, Arizona, in 2009 had a...
asked 24 minutes ago -
. Please give the mechanism for this type of problem. Step by
Step
The toxin that...
asked 28 minutes ago -
If you have a 1M stock solution and you want to dilute 1 :10
with water,...
asked 30 minutes ago -
In a load instruction, the effective address is obtained by
A) Retriving the address from a...
asked 29 minutes ago -
Use the following information to answer this question.
Windswept, Inc. 2017 Income Statement ($ in millions)...
asked 30 minutes ago -
A mutual fund salesperson has arranged to call on four people
tomorrow. Based on past experience...
asked 1 hour ago -
Let the RV Y has the pdf
f ( y ) = 6 y ( 1...
asked 1 hour ago -
Question 12
Where should a copy of a private key should be placed so it is...
asked 33 minutes ago