Homework Answers
Answer:
option A) correct. i.e $52,000
| Degree of Operating Leverage Is: |
|
=% change in operating income (EBIT )/ %change in sales |
| 3 = % change in operating income (EBIT ) /10% |
| % change in operating income (EBIT )= 10%*3 |
| % change in operating income (EBIT )= 30% |
| New operating income =$40,000+(40,000*.30) |
| = $ 52,000 |
Add Answer to:
9.E.D. Manufacturing, Inc. produces and sells ice skates. The current net operating income is $40,000, with...
Sales for Green Inc. are expected to change by 9%. If Green's degree of operating leverage...
Sales for Green Inc. are expected to change by 9%. If Green's degree of operating leverage is 2.60, how much is Green's operating income expected to change? 3 Green's operating income is expected to change by OU
1. (8 points) Key Corporation produces and sells a single product. The company's contribution format income...
1. (8 points) Key Corporation produces and sells a single product. The company's contribution format income statement for July appears below: Sales (5,500 units) Variable expenses Contribution margin Fixed expenses Net operating income 357,500 236,500 121,000 102,200 18,800 The company has no beginning or ending inventories. Required: a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net operating income increase? d. How...
Sales (100,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before taxes...
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...
QUESTION 27 When sales dollars increase, the net income of a company with a high degree...
QUESTION 27 When sales dollars increase, the net income of a company with a high degree of operating leverage will increase more quickly than in a company with a lower operating leverage. However, when sales dollars decrease, the net income of a company with a high degree of operating leverage will decrease more quickly than in a company with a lower operating leverage. True O False QUESTION 28 Jen & Berry's currently sells 100,000 pints of ice cream per month...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 2,160,000 Variable expenses 1,080,000 Contribution margin 1,080,000 Fixed expenses 180,000 Net operating income $ 900,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $160,000 per year. Its operating results for last year were as follows: Sales $ 3,000,000 Variable expenses 1,500,000 Contribution margin 1,500,000 Fixed expenses 160,000 Net operating income $ 1,340,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales $ 3,240,000 Variable expenses 1,620,000 Contribution margin 1,620,000 Fixed expenses 200,000 Net operating income $ 1,420,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 2,080,000 Variable expenses 1,040,000 Contribution margin 1,040,000 Fixed expenses 180,000 Net operating income $ 860,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point...
Using the degree of operating leverage, what is the estimated percent increase in net operating income...
Using the degree of operating leverage, what is the estimated
percent increase in net operating income of a 5% increase in sales?
(Round your intermediate calculations and final answer to 2
decimal places.)
Assume that the amounts of the company’s total variable expenses
and total fixed expenses were reversed. In other words, assume that
the total variable expenses are $30,100 and the total fixed
expenses are $65,000. Under this scenario and assuming that total
sales remain the same, what is...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses...
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $ 2,000,000 Variable expenses 1,000,000 Contribution margin 1,000,000 Fixed expenses 180,000 Net operating income $ 820,000 Required: Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point...
Sales for Green Inc. are expected to change by 9%. If Green's degree of operating leverage is 2.60, how much is Green's operating income expected to change? 3 Green's operating income is expected to change by OU
1. (8 points) Key Corporation produces and sells a single product. The company's contribution format income statement for July appears below: Sales (5,500 units) Variable expenses Contribution margin Fixed expenses Net operating income 357,500 236,500 121,000 102,200 18,800 The company has no beginning or ending inventories. Required: a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 100 units, by how much should net operating income increase? d. How...
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...
QUESTION 27 When sales dollars increase, the net income of a company with a high degree of operating leverage will increase more quickly than in a company with a lower operating leverage. However, when sales dollars decrease, the net income of a company with a high degree of operating leverage will decrease more quickly than in a company with a lower operating leverage. True O False QUESTION 28 Jen & Berry's currently sells 100,000 pints of ice cream per month...
Using the degree of operating leverage, what is the estimated
percent increase in net operating income of a 5% increase in sales?
(Round your intermediate calculations and final answer to 2
decimal places.)
Assume that the amounts of the company’s total variable expenses
and total fixed expenses were reversed. In other words, assume that
the total variable expenses are $30,100 and the total fixed
expenses are $65,000. Under this scenario and assuming that total
sales remain the same, what is...
Most questions answered within 3 hours.
-
1. When a nearsighted person looks at an object that is in the
distance with their...
asked 42 minutes ago -
QUESTION 8
Both of these statements will store the same value in the
variable $number
$number...
asked 1 hour ago -
The price of 1 lb of potatoes is $1.75. If all the potatoes sold
today at...
asked 2 hours ago -
Garcia Company issues 20.00%, 15-year bonds with a par value of
$470,000 and semiannual interest payments....
asked 2 hours ago -
In C++ Programming, Try using loops only.
This lab demonstrates the use of the While Loop...
asked 2 hours ago -
Effect of DCMU and sodium azide on Chlamydomonas? We did an
experiment where we had Chlamydomonas...
asked 3 hours ago -
1a) According to the ideal gas law, _______________.
a. a gas has infinite volume at absolute...
asked 5 hours ago -
Oakdale Fashions, Inc. had $245,000 in 2018 taxable income.
Using the tax schedule in Table 2.3...
asked 5 hours ago -
The marketing class at CSUS had an average score of 150. An
educational analyst determined that...
asked 6 hours ago -
Justin Case has purchased a $250 000 home by putting 20 % down
and taking out...
asked 6 hours ago -
1. In a labor market, marginal cost for a firm is
____________.
a. recruiting cost
b....
asked 7 hours ago -
On January 1, 2019, ABC Company issued $60,000,000 of 20-year,
10.5% bonds when the market rate...
asked 7 hours ago