Homework Answers
| Degree of Operating Leverage is calculated as Contribution margin divided by Net income |
| Degree of Operating Leverage indicates increase(decrease) in net income in comparison to increase(decrease) in sales. |
| Proportion of change in earnings in between both companies = 10.56/2.40 = 4.40 times |
| Option C 4.40 times is correct |
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Sheridan Company's degree of operating leverage is 2.40. Carla Vista Corporation's degree of operating leverage is...
Question 8 Vaughn Company's degree of operating leverage is 2.80. Cullumber Corporation's degree of operating leverage...
Question 8 Vaughn Company's degree of operating leverage is 2.80. Cullumber Corporation's degree of operating leverage is 17.36. Cullumber's earnings would go up (or down) byas much as Vaughn's with an equal increase (or decrease) in sales. Ча 1/6.20 times 2.80 times 6.20 times 17.36 times
QUESTION 16 Miller Manufacturing's degree of operating leverage is 1.5. Warren Corporation's degree of operating leverage...
QUESTION 16 Miller Manufacturing's degree of operating leverage is 1.5. Warren Corporation's degree of operating leverage is 45. Warren's earnings would go up for down by as much as Miller's with an equal increase for decrease in sales 1/3 2 times 3 times 6 times SIGN
Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating...
Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 28% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 28% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 28% increase in sales....
answer C Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and...
answer C
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales, fixed costs are $120,000 per month. (1) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, eg. 0.38-38%.) Contribution margin ratio 60 % eTextbook and Media Attempts: 1 of 12 used (2) ✓ Your...
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems....
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales; fixed costs are $120,000 per month. (a1) ✓ Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 - 38%.) Contribution margin ratio 60 % e Textbook and Media Attempts: 1 of 12 used (22)...
ANSWER D Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and...
ANSWER D
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales; fixed costs are $120,000 per month. (21) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38-38%) Contribution margin ratio 60 % e Textbook and Media Attempts: 1 of 12 used ✓ Your...
degree of operating leverage and financial leverage
reflects last year’s operations:Sales $18,000,000Variable costs 7,000,000Revenue before fixed costs $11,000,000Fixed costs 6,000,000EBIT $5,000,000Interest expense 1,750,000Earnings before taxes (EBT) $3,250,000Taxes 1,250,000Net income $2,000,000REQUIRED:1. At this level of output, what is the degree of operating leverage?2. What is the degree of financial leverage?3. What is the degree of combined leverage?4. If sales increase by 15%, by what percent would EBT (and net income) increase?5. What is your firm’s break-even point in sales dollars?
solve C Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and...
solve C
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales, fixed costs are $120,000 per month. (1) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, eg. 0.38-38%.) Contribution margin ratio 60 % eTextbook and Media Attempts: 1 of 12 used (2) ✓ Your...
Problem 3-38 (Part Level Submission) Carla Vista Company produces a molded briefcase that is distributed to...
Problem 3-38 (Part Level Submission) Carla Vista Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes. Sales price Variable cost of goods sold Variable selling expenses Variable administrative expenses $41.00 13.00 11.60 4.00 Annual fixed expenses Overhead Selling expenses Administrative expenses $14,203,800 2,822,550 5,918,250 Carla Vista can produce 2,731,500 cases a year. The projected net income for the coming year is expected to be...
Suppose that there are two firms operating in a market. Suppose that the degree of operating leverage...
Suppose that there are two firms operating in a market. Suppose that the degree of operating leverage for Firm 1 is DOL= 1.5 while the degree of operating leverage for Firm 2 is DOL=2 How much would the profits of each firm change if both firms experienced an increase in quantity sold of 10%? Suppose instead that each firm experiences a 5% decrease in quantity sold. What would happen to the profits of each firm? Which firm’s profits are more sensitive to...
Question 8 Vaughn Company's degree of operating leverage is 2.80. Cullumber Corporation's degree of operating leverage is 17.36. Cullumber's earnings would go up (or down) byas much as Vaughn's with an equal increase (or decrease) in sales. Ча 1/6.20 times 2.80 times 6.20 times 17.36 times
QUESTION 16 Miller Manufacturing's degree of operating leverage is 1.5. Warren Corporation's degree of operating leverage is 45. Warren's earnings would go up for down by as much as Miller's with an equal increase for decrease in sales 1/3 2 times 3 times 6 times SIGN
Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 28% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 28% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 28% increase in sales....
answer C
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales, fixed costs are $120,000 per month. (1) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, eg. 0.38-38%.) Contribution margin ratio 60 % eTextbook and Media Attempts: 1 of 12 used (2) ✓ Your...
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales; fixed costs are $120,000 per month. (a1) ✓ Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 - 38%.) Contribution margin ratio 60 % e Textbook and Media Attempts: 1 of 12 used (22)...
ANSWER D
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales; fixed costs are $120,000 per month. (21) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38-38%) Contribution margin ratio 60 % e Textbook and Media Attempts: 1 of 12 used ✓ Your...
solve C
Carla Vista Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $49 throughout the country to loyal alumni of over 1,700 schools. Carla Vista's variable costs are 40% of sales, fixed costs are $120,000 per month. (1) Your answer is correct. Calculate contribution margin ratio. (Round ratio to 2 percentage places, eg. 0.38-38%.) Contribution margin ratio 60 % eTextbook and Media Attempts: 1 of 12 used (2) ✓ Your...
Problem 3-38 (Part Level Submission) Carla Vista Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes. Sales price Variable cost of goods sold Variable selling expenses Variable administrative expenses $41.00 13.00 11.60 4.00 Annual fixed expenses Overhead Selling expenses Administrative expenses $14,203,800 2,822,550 5,918,250 Carla Vista can produce 2,731,500 cases a year. The projected net income for the coming year is expected to be...
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