Amount | Percent of Sales | |
Sales | $137,000 | 100% |
Variable expenses | 54,800 | 40% |
Contribution margin | 82,200 | 60% |
Fixed expenses | 17,700 | |
Net Operating | $65,200 |
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 12% increase in sales.
3. Construct a new contribution format income statement for the company assuming a 12% increase in sales.
Amount Percent of Sales Sales $137,000 100% Variable expenses 54,800 40% Contribution margin 82,200 60% Fixed...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 137,000 100 % Variable expenses 54,800 40 % Contribution margin 82,200 60 % Fixed expenses 17,000 Net operating income $ 65,200 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 12% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $ 137,000 54,800 Percent of Sales 100% 403 608 Sales Variable expenses Contribution margin Fixed expenses Net operating income 82,200 19,000 $ 63,200 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...
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $ 137,000 54,800 Percent of Sales 100% 40% Sales Variable expenses Contribution margin Fixed expenses Net operating income 60% 82,200 24,000 58,200 $ 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 10% increase in sales. 3. Construct a new contribution format income statement...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 132,000 100 % Variable expenses 52,800 40 % Contribution margin 79,200 60 % Fixed expenses 17,000 Net operating income $ 62,200 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 15% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 143,000 100 % Variable expenses 57,200 40 % Contribution margin 85,800 60 % Fixed expenses 18,000 Net operating income $ 67,800 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 19% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 141,000 100 % Variable expenses 56,400 40 % Contribution margin 84,600 60 % Fixed expenses 22,000 Net operating income $ 62,600 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 25% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 122,000 100 % Variable expenses 48,800 40 % Contribution margin 73,200 60 % Fixed expenses 22,000 Net operating income $ 51,200 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 29% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 141,000 100 % Variable expenses 56,400 40 % Contribution margin 84,600 60 % Fixed expenses 17,000 Net operating income $ 67,600 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 20% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100 % Variable expenses 52,000 40 % Contribution margin 78,000 60 % Fixed expenses 19,000 Net operating income $ 59,000 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 15% increase in sales. 3. Construct a new contribution...
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100 % Variable expenses 52,000 40 % Contribution margin 78,000 60 % Fixed expenses 16,000 Net operating income $ 62,000 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 29% increase in sales. 3. Construct a new contribution...