Homework Answers
Contribution margin ratio before automation = 111,000/207,000 = 53.6232%
Contribution margin ratio after automation = 157,000/207,000
= 75.8454%
1.
| Breakeven sales before automation (19,000/53.6232%) | 35,432.42 |
|
Breakeven sales after automation (59,000/75.8454%) |
77,789.82 |
2. Dol = Contribution margin/net operating income
| DOL before automation (111,000/92000) | 1.2065 |
| DOL after automation (157,000/98,000) | 1.6020 |
Note that this problem involves lot of rounding off of numbers. Comment if you face any issues
Add Answer to:
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed...
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed...
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Before After Automation Automation $198,000 $198,000 78,000 38,000 $120,000 $160,000 15,000 58,000 $105,000 $102,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation. Complete this question by entering your answers in the tabs below....
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed...
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Before Automation $194,000 89, eee $105,eee 19, $ 86,888 After Automation $194,000 55,000 $139, eee 63,000 $ 76,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation Complete this question by entering your answers...
Chapter 6 Assignment i Saved Lobster Trap Company is considering automating its manufacturing facility. Company information...
Chapter 6 Assignment i Saved Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: 10 points Before Automation Sales revenue $191,000 Less: Variable 108,000 cost Contribution margin $ 83,000 Less: Fixed cost 11,000 Net operating income_ $ 72,000 After Automation $191,000 41,000 eBook $150,000 57,000 $ 93,000 Print Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after...
The following information applies to the questions displayed below) Beacon Company is considering automating its production...
The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $8.23 million, and the equipment has a useful life of 7 years with a residual value of $1,090,000. The company will use straight line depreciation. Beacon could expect a production increase of 47,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 82,000 units Per Proposed (automation)...
Required information [The following information applies to the questions displayed below.] Beacon Company is considering automating...
Required information [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $11.25 million, and the equipment has a useful life of 10 years with a residual value of $1,050,000. The company will use straight- line depreciation. Beacon could expect a production increase of 32,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 78,000 units Per...
Beacon Company is considering automating its production facility. The initial investment in automation would be $8.26million,...
Beacon Company is considering automating its production facility. The initial investment in automation would be $8.26million, and the equipment has a useful life of 7 years with a residual value of $1,190,000. The company will use straight-line depreciation. Beacon could expect a production increase of 41,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) Proposed (automation) 78,000 units 119,000 units Production and sales volume Per Unit Total Per Unit Total...
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...
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...
Operating Leverage Income statements for two different companies in the same industry are as follows: Trimax, Inc. Quintex, Inc. $875,000 175,000 $700,000 630,000 $70,000 Sales $700,000 350,000...
Operating Leverage Income statements for two different companies in the same industry are as follows: Trimax, Inc. Quintex, Inc. $875,000 175,000 $700,000 630,000 $70,000 Sales $700,000 350,000 $350,000 280,000 $70,000 Less: Variable costs Contribution margin Less: Fixed costs Operating income Required: 1. Compute the degree of operating leverage for each company. Trimax Quintex 2. Compute the break-even point in dollars for each company Trimax, Inc. Quintex, Inc. Why is the break-even point for Quintex, Inc., higher? $700,000 350,000 $350,000 $875,000...
Daising Canning Company is considering an expansion of its facilities. Its current income statement is as...
Daising Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales $ 5,200,000 Variable costs (50% of sales) 2.600.000 Fored costs 1.820,000 Eamings before interest and taxes (EBIT) $ 780,000 Interest (10% costi 240.000 Eamings before taxes (EBT) $540,000 Tax (40%) 216.000 Eamings after taxes (EAT) $ 324,000 Shares of common stock 220,000 Eamings per share 1.47 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par...
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Before After Automation Automation $198,000 $198,000 78,000 38,000 $120,000 $160,000 15,000 58,000 $105,000 $102,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation. Complete this question by entering your answers in the tabs below....
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Before Automation $194,000 89, eee $105,eee 19, $ 86,888 After Automation $194,000 55,000 $139, eee 63,000 $ 76,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation Complete this question by entering your answers...
Chapter 6 Assignment i Saved Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: 10 points Before Automation Sales revenue $191,000 Less: Variable 108,000 cost Contribution margin $ 83,000 Less: Fixed cost 11,000 Net operating income_ $ 72,000 After Automation $191,000 41,000 eBook $150,000 57,000 $ 93,000 Print Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after...
The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $8.23 million, and the equipment has a useful life of 7 years with a residual value of $1,090,000. The company will use straight line depreciation. Beacon could expect a production increase of 47,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 82,000 units Per Proposed (automation)...
Required information [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $11.25 million, and the equipment has a useful life of 10 years with a residual value of $1,050,000. The company will use straight- line depreciation. Beacon could expect a production increase of 32,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 78,000 units Per...
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...
Operating Leverage Income statements for two different companies in the same industry are as follows: Trimax, Inc. Quintex, Inc. $875,000 175,000 $700,000 630,000 $70,000 Sales $700,000 350,000 $350,000 280,000 $70,000 Less: Variable costs Contribution margin Less: Fixed costs Operating income Required: 1. Compute the degree of operating leverage for each company. Trimax Quintex 2. Compute the break-even point in dollars for each company Trimax, Inc. Quintex, Inc. Why is the break-even point for Quintex, Inc., higher? $700,000 350,000 $350,000 $875,000...
Daising Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales $ 5,200,000 Variable costs (50% of sales) 2.600.000 Fored costs 1.820,000 Eamings before interest and taxes (EBIT) $ 780,000 Interest (10% costi 240.000 Eamings before taxes (EBT) $540,000 Tax (40%) 216.000 Eamings after taxes (EAT) $ 324,000 Shares of common stock 220,000 Eamings per share 1.47 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par...
Most questions answered within 3 hours.
-
An infinite sheet of charge that has a surface charge density of
39 nC/m2 lies in...
asked 32 minutes ago -
After watching the lectures I am still having a hard time
understanding these equations.
1. The...
asked 1 hour ago -
Testing:
H0:μ=56.9
H1:μ<56.9
Your sample consists of 23 subjects, with a mean of 56.3 and
standard...
asked 1 hour ago -
straight wire, labeled as Wire A, lies horizontally on a
tabletop and is oriented to run...
asked 1 hour ago -
For a Chi-Squared Goodness of Fit Test about a uniform
distribution, complete the table.
Round to...
asked 2 hours ago -
Milk of magnesia is only slightly soluble in water. Kc for the
reaction Mg(OHs)(s)>Mg2+(a) + 2OH-1(aq)...
asked 2 hours ago -
Excel's HYPGEOM.DIST function can be used to compute _____.
a. both hypergeometric probabilities and cumulative
hypergeometric...
asked 2 hours ago -
The rocket used for the human lunar missions was the Saturn V
rocket. At liftoff the...
asked 2 hours ago -
1. The East Street Bagel Shop has a weekly demand for 3,500
bagels, which they make...
asked 2 hours ago -
paraphrasing each paragraph
“Where two or more persons knowingly act together unlawfully,
the act of each...
asked 2 hours ago -
The lateral line system in fish is contained which of the
following?
chemoreceptors
photoreceptors
mechanoreceptors
odor...
asked 2 hours ago -
Find the y-intercept of y =-5 x. The y-intercept of y equals
negative 5 x is______...
asked 2 hours ago