Calculation of operating leverage:
Operating leverage= Contribution/operating income
Contribution= sales-variable cost= 150000-75000-5000= 70000
Operating income= 61000
Operating leverage= 70000/61000= 1.15
So correct answer is b) 1.15
Crowder's Quilts Income Statement For 2005 Sales Revenue (250 @ $600 per unit) Cost of Goods...
The following information was drawn from the records of Calico Company Income Statement sales Revenue (25@ $680 per unit) Cost of Goods Sold: Variable (250 @ s3e0 per unit) $150,000 Fixed Gross Margin sales Commissions (250 $20) Depreciation Net Income (75,000) (8,000) 67,000 (5,000) (1,000) $ 61,000 Based on this information the magnitude of operating leverage is approximatel y (round to nearest hundredth): Required information 1.15 No 1.09 0.87 < Prev 4-5 of 10 Next >
find the break-even point:
BEHAVORIAL INCOME STATEMENT JAN FEB PER 600 800 UNIT SOLD SOLD SALES $10 $6,000 $8,000 VARIABLE COSTS $4 $2,400 $3,200 Less CONTRIBUTION MARGIN $6 $3,600 $4,800 Equals FIXED COSTS $2,400 $2,400 Less $1,200 $2,400 Equals GROSS PROFIT $7 AVG COST PER UNIT $8 $2 $3 PROFIT PER UNIT 30% RETURN ON SALES 20%
WESTERWHEAT Contribution Margin Income Statement 150,000 units sold Total Per Unit Percent Sales revenue $1,950,000 $13.00 1008 Less: Variable 1,200,000 8.00 620 costs Contribution $ 750,000 $ 5.00 388 Less: Fixed costs 350,000 Net operating $ 400,000 income Knowledge Check 01 What is Westerwheat's degree of operating leverage? 2143 4.875 1.875 3.000 Knowledge Check O2 A 20 percent increase in sales revenue will increase net operating Income by 42.86% 97.50% 60.00% 37.50% Knowledge Check 03 Decreasing fixed costs by $100,000...
Merchandiser’s Income Statement Puzzler Using the following information, calculate (a) net sales, (b) cost of goods sold, (c) gross margin from sales, and (d) net income. Freight In $ 400 Merchandise Inventory, Jan.1 30,000 Gross Sales 120,000 Purchase Discounts 600 Advertising Expense 8,000 Purchases 40,000 Merchandise Inventory, Dec.31 10,000 Sales Returns and Allowances 1,000 General and Administrative Expenses 14,000 Net Sales a. ____________________ Cost of Goods Sold b. ____________________ Gross Margin from Sales ...
OSLO COMPANY PREPARED THE FOLLOWING CONTRIBUTION FORMAT INCOME STATEMENT BASED ON A SALES VOLUME OF 1,000 UNITS THE RELEVANT RANGE OF PRODUCTION OF 500 UNITS TO 1500 UNITS): SALES: $20,000 VARIABLE EXPENSES 12,000 CONTRIBUTION MARGIN 8,000 FIXED EXPENSES 6,000 NET OPERATING INCOME 2,000 SHOW ALL WORK 1. IF THE VARIABLE COST PER UNIT INCREASES BY $1, SPENDING ON ADVERTISING INCREASES BY $1,500, AND UNIT SALES INCREASE BY 250 UNITS, WHAT WOULD BE NET OPERATING INCOME? 2. WHAT IS THE BREAK...
Restate the following income statement for a retailer in contribution format. Sales revenue ($100 per unit) $ 64,000 Less cost of goods sold ($62 per unit) 39,680 Gross margin 24,320 Less operating costs: Commissions expense ($7 per unit) $ 4,480 Salaries expense 7,900 Advertising expense 6,000 Shipping expense ($2 per unit) 1,280 19,660 Operating income $ 4,660 Per Unit select an income statement item $enter a dollar amount $enter a dollar amount Select an opening name for section one: Select...
The following income statement is provided for Grant, Inc. Sales revenue (1,700 @ $15.20 per unit) Variable costs (1,700 @ $7.20 per unit) Fixed costs $25,840 12,240 3,600 $10,000 Net income What is this company's magnitude of operating leverage?
The following Income statement is provided for Vargas, Inc. Sales revenue (2,800 units * $20.30 per unit) Cost of goods sold (variable; 2,800 units * $10.30 per unit) Cost of goods sold (fixed) Gross margin Administrative salaries Depreciation Supplies (2,800 units * $2.30 per unit) Net income $ 56,840 (28,840) (4,300) 23,700 (6,300) (5,300) (6,440) $ 5,660 What is this company's magnitude of operating leverage? (Round your answer to 2 decimal places.) Multiple Choice 0.24 419 0.25
OSLO COMPANY PREPARED THE FOLLOWING CONTRIBUTION FORMAT INCOME STATEMENT BASED ON SALES VOLUME OF $1,000 UNITS ( THE RELEVANT RANGE OF PRODUCTION IS 500 UNITES TO 1500 UNITS. SALES $20,000 VARIABLE EXPENSES $12,000 CONTRIBUTION MARGIN $8,000 FIXED EXPNSES $6,000 NET OPERATING INCOME $2,000 1. WHAT IS THE CONTRIBUTION MARGIN PER UNIT? 2. WHAT IS THE CONTRIBUTION MARGIN RATIO? 3. WHAT IS THE VARIABLE EXPENSE RATIO? 4. IF SALES INCREASE TO 1,001 UNITS, WHAT WOULD BE THE INCREASE IN NET OPERATING...
Merchandise Inc. has prepared the Income statement including the following data: Sales $100,000 Cost of Goods Sold $75,000 Gross Profit $25,000 Expenses $10,000 Net Profit $15,000 The comparative balance sheet shows the following data (by definition, accounts payable relates to merchandise purchases only): End of Year Beginning of Year Accounts Receivables (net) $7,000 $8,000 Inventory $3,000 $2,000 Prepaid Expenses $2,000 $1,000 Accounts Payable $1,000 $1,500 REQUIRED 1) Determine the amount of Cash received from Customers. 2) Determine the amount of...