Question

The following table represents forecasted sales information for Pique Co.

	Forecasted Operations	Sales with 60.00% Increase	Unit Change
Sales in units (millions)	200.00	320.00	120.00
Sales revenues	$3,000.00	$4,800.00	$1,800.00
Variable cost of goods sold	(2,000.00)	(3,200.00)	(1,200.00)
Gross profit	$1,000.00	$1,600.00	$600.00
Fixed operating costs	(170.00)	(170.00)	(0.00)
Net operating income	$830.00	$1,430.00	$600.00

By how much will net operating income increase for the given increase in sales and associated expenses? (Round your answer to the nearest whole percent.)   

Using the percent change in net operating income computed in the previous section, calculate the degree of operating leverage for the projected change of 60.00% from the original forecast.   

Assuming an identical cost structure, compared to a company with a degree of operating leverage 0.84, how risky is Pique Co.?

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

All em - 9 W ? v 1 ENG 10:33 16-03-2020 23 X K601 2 582 583 - XVfx G H J K L M N O P Q 584 585 %CHANGE IN NET OPERATING INCOME = %CHANGE IN NET OPERATING INCOME = %CHANGE IN NET OPERATING INCOME = %CHANGE IN NET OPERATING INCOME = CHANGE IN INCOME/BASE NET INCOME 600/830 72.29% 72% 586 ANSWER 1 587 588 589 590 591 ANSWER 2 592 593 594 DEGREE OF OPERATING LEVERAGE = DEGREE OF OPERATING LEVERAGE = DEGREE OF OPERATING LEVERAGE = DEGREE OF OPERATING LEVERAGE = %CHANGE IN NET OPERATING INCOME/%CHANGE IN SALES 72.29%/60% 1.2048 1.20 595 HIGHER THE OPERATING LEVERAGE, HIGHER THE RISK 596 ANSWER 3 597 598 599 600 601 602 603 604 605 ... CASH BUDGET budget 45 days cycle ROE, BV MV ratio VARIANCE BEP, OL FL ratios DETROIT float B-S profit loss SALES BUDGET dupont ... :