Homework Answers
Part 1)
Operating leverage
= contribution margin ÷ net operating income
= 271080 ÷ 125500
=2.16
Part 2)
Increase in net operating income
= operating leverage × increase in sales percentage
= 2.16 × 5%
= 10.8 %
Part 3)
Net operating income
= existing operating income ×(1+increase in net operating income)
= 125500 × (1+10.8%)
= $139054
Part 4)
Operating leverage
= revised contribution margin ÷ revised net income
= (271080×1.05)÷139054
= 2.05
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The vice-president of sales and marketing, Madison Tremblay, is
trying to plan for the coming year in terms of production needs to
meet the forecasted sales. The board of directors is very
supportive of any initiatives that will lead to increased profits
for the company in the upcoming year.
Waterways markets a simple water controller and timer that it mass
produces. During 2016, the company sold 332,500 units at an average
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National Basketball Association (WNBA). For the first 6 months of
2017, the company reported the following operating results while
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units.
Amount
Sales
$4,804,000
Cost of goods sold
3,503,718
Selling and administrative expenses
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$852,499
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Kingbird, Inc. manufactures souvenirs and sells the products to
souvenir shops across Canada. Lisa McKay is the new owner, and is
concerned about the low margins. She would like to find a way to
improve the company’s profitability. The accountant provides her
the following financial information: sales are $306,000, of which
60% is cost of goods sold. Cost of goods sold consists of direct
materials (20%), direct labour (30%), and fixed manufacturing
overhead (50%). Operating expenses consist of variable expenses...
Question, Fill in the
blanks
Thank you, I really appreciate it!
Waterways Continuing Problem-6 (Part 1) The vice-president of sales and marketing, Madison Tremblay, is trying to plan for the coming year in terms of production needs to meet the forecasted sales. The board of directors is very supportive of any initiatives that will lead to increased profits for the company in the upcoming year. Waterways markets a simple water controller and timer that it mass produces. During 2016, the...
Waterways Continuing Problem-6 (Part 1)
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trying to plan for the coming year in terms of production needs to
meet the forecasted sales. The board of directors is very
supportive of any initiatives that will lead to increased profits
for the company in the upcoming year.
Waterways markets a simple water controller and timer that it mass
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Hi, please go over answers that are filled in and please answer
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