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Based on the income statements of the three following retail businesses, which company has the highest...
Based on the income statements shown below, which division has the cost structure with the highest...
Based on the income statements shown below, which division has the cost structure with the highest operating leverage? Bottled Revenue Variable costs Contribution margin Fixed costs Soft Drinks $ 50,000 (10,000) 40,000 (30,000) $ 10,000 Water $50,000 (5,000) 45,000 (40,000) $ 5,000 Fruit Juices $ 50,000 (30,000) 20,000 (10,000) $ 10,000 Net income Multiple Choice Ο Bottled Water. Ο Soft Drinks. Ο The three divisions have identical operating leverage. Ο Fruit Juices.
Which of the following companies should have the highest beta? Multiple Choice Orange Company that has...
Which of the following companies should have the highest beta? Multiple Choice Orange Company that has low operating and financial leverage. Yellow Company that has highly cyclical revenues and uses high levels of fixed costs. Black Company that has highly cyclical business activity and low operating leverage Red Company that has low cyclical business activity and low fixed costs. Blue Company that has low cyclical business activity and high operating leverage.
The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir...
The following CVP income statements are available for Blanc
Company and Noir Company.
Blanc Company
Noir Company
Sales
$500,000
$500,000
Variable costs
280,000
180,000
Contribution margin
220,000
320,000
Fixed costs
170,000
270,000
Net income
$50,000
$50,000
Contribution Margin Ratio
Blanc Company
0.44
Noir Company
0.64
Break-even Point
Blanc Company
$386,364
Noir Company
$421,875
Margin of Safety Ratio
Blanc Company
0.227
Noir Company
0.156
Degree of Operating Leverage
Blanc Company
4.4
Noir Company
6.4
CVP income statement assuming that sales revenue...
Day Company produces and sells three products: Alpha, Beta, and Gamma. Their respective selling prices are...
Day Company produces and sells three products: Alpha, Beta, and Gamma. Their respective selling prices are $1, $2, and $3. Variable costs per unit are $0.50, $1.50, and $2.00. Total fixed costs amount to $60,000. For every unit of Alpha sold, three units of Beta and four units of Gamma are sold. What is the contribution margin per unit for each product? Determine the operating income, assuming that sales in units for the three products were 20,000, 40,000, and 50,000....
ACCT 2301 Operating Leverage Handout #8 d cot ha Contribution margin income statements for two competing...
ACCT 2301 Operating Leverage Handout #8 d cot ha Contribution margin income statements for two competing companies are provided below: Anthe Alpha Cempany Revenue Less variable costs Contribution margin Less fixed costs Net income Gamma Company $500,000 200.000 $300,000 270.000 $30,000 $500,000 350,000 $150,000 120.000 $30,000 Required: 1) Show each company's cost structure by inserting the percentage of the company's revenue represented by each item on the contribution income statement: Alpha Company $500,000 200,000 $300,000 Gemma Company $s00.000 350,000 $150,000...
Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved...
Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved if Segme A were eliminated. ZACHARY COMPANY Income Statements for the Year 2018 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income $ 166,000 (128,000) (18,000) 20,000 (41,000) (7.000) $ (28,000) $247,000 (76,000) (23,000) 148,000 (50,000) (20,000) $ 78,000 $253,000 (84,000) 25,000) 144,000 (34,000) $110,000 Required a....
Assume a company with two divisions (A and B) prepared the following segmented income statement: Sales...
Assume a company with two divisions (A and B) prepared the following segmented income statement: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income A $ ? 120,000 ? 100,000 $ ? B $ 200,000 140,000 ? 80,000 $ (20,000 What is Division A's segment margin? Multiple Choice O $53,000 $13,000 $72,700 100,000 $ ? 80,000 $ (20,000 $ Traceable fixed expenses Segment margin Common fixed expenses Net operating income What is Division...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co....
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed...
Income Statements Segmented by Products Clay Consulting Firm provides three types of client services in three health-ca...
Income Statements Segmented by Products Clay Consulting Firm provides three types of client services in three health-care-related industries. The income statement for July is as follows: Clay Consulting Firm Income Statement For Month of July Sales Less variable costs Contribution margin $900,000 (604,000) 296,000 Less fixed expenses Service Selling and administrative Net income $70,000 65,000 (135,000) $161,000 The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows: Sales Contribution margin ratio Direct...
The following CVP income statements are available for Blanc Company and Noir Company, Sales Variable costs...
The following CVP income statements are available for Blanc Company and Noir Company, Sales Variable costs Contribution margin Fixed costs Net income Blanc Company $490,000 294,000 196,000 176,400 $19,600 Noir Company $490,000 245,000 245,000 225,400 $19,600 Calculate Contribution margin ratio. (Round answers to 2 decimal places, e.g. 0.32.) Contribution Margin Ratio Blanc Company Noir Company eTextbook and Media Compute the break-even point in dollars for each company. (Round answers to 0 decimal places, e.g. 5,125.) Break-even Point Blanc Company $...
Based on the income statements shown below, which division has the cost structure with the highest operating leverage? Bottled Revenue Variable costs Contribution margin Fixed costs Soft Drinks $ 50,000 (10,000) 40,000 (30,000) $ 10,000 Water $50,000 (5,000) 45,000 (40,000) $ 5,000 Fruit Juices $ 50,000 (30,000) 20,000 (10,000) $ 10,000 Net income Multiple Choice Ο Bottled Water. Ο Soft Drinks. Ο The three divisions have identical operating leverage. Ο Fruit Juices.
Which of the following companies should have the highest beta? Multiple Choice Orange Company that has low operating and financial leverage. Yellow Company that has highly cyclical revenues and uses high levels of fixed costs. Black Company that has highly cyclical business activity and low operating leverage Red Company that has low cyclical business activity and low fixed costs. Blue Company that has low cyclical business activity and high operating leverage.
The following CVP income statements are available for Blanc
Company and Noir Company.
Blanc Company
Noir Company
Sales
$500,000
$500,000
Variable costs
280,000
180,000
Contribution margin
220,000
320,000
Fixed costs
170,000
270,000
Net income
$50,000
$50,000
Contribution Margin Ratio
Blanc Company
0.44
Noir Company
0.64
Break-even Point
Blanc Company
$386,364
Noir Company
$421,875
Margin of Safety Ratio
Blanc Company
0.227
Noir Company
0.156
Degree of Operating Leverage
Blanc Company
4.4
Noir Company
6.4
CVP income statement assuming that sales revenue...
ACCT 2301 Operating Leverage Handout #8 d cot ha Contribution margin income statements for two competing companies are provided below: Anthe Alpha Cempany Revenue Less variable costs Contribution margin Less fixed costs Net income Gamma Company $500,000 200.000 $300,000 270.000 $30,000 $500,000 350,000 $150,000 120.000 $30,000 Required: 1) Show each company's cost structure by inserting the percentage of the company's revenue represented by each item on the contribution income statement: Alpha Company $500,000 200,000 $300,000 Gemma Company $s00.000 350,000 $150,000...
Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved if Segme A were eliminated. ZACHARY COMPANY Income Statements for the Year 2018 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income $ 166,000 (128,000) (18,000) 20,000 (41,000) (7.000) $ (28,000) $247,000 (76,000) (23,000) 148,000 (50,000) (20,000) $ 78,000 $253,000 (84,000) 25,000) 144,000 (34,000) $110,000 Required a....
Assume a company with two divisions (A and B) prepared the following segmented income statement: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income A $ ? 120,000 ? 100,000 $ ? B $ 200,000 140,000 ? 80,000 $ (20,000 What is Division A's segment margin? Multiple Choice O $53,000 $13,000 $72,700 100,000 $ ? 80,000 $ (20,000 $ Traceable fixed expenses Segment margin Common fixed expenses Net operating income What is Division...
The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed...
Income Statements Segmented by Products Clay Consulting Firm provides three types of client services in three health-care-related industries. The income statement for July is as follows: Clay Consulting Firm Income Statement For Month of July Sales Less variable costs Contribution margin $900,000 (604,000) 296,000 Less fixed expenses Service Selling and administrative Net income $70,000 65,000 (135,000) $161,000 The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows: Sales Contribution margin ratio Direct...
The following CVP income statements are available for Blanc Company and Noir Company, Sales Variable costs Contribution margin Fixed costs Net income Blanc Company $490,000 294,000 196,000 176,400 $19,600 Noir Company $490,000 245,000 245,000 225,400 $19,600 Calculate Contribution margin ratio. (Round answers to 2 decimal places, e.g. 0.32.) Contribution Margin Ratio Blanc Company Noir Company eTextbook and Media Compute the break-even point in dollars for each company. (Round answers to 0 decimal places, e.g. 5,125.) Break-even Point Blanc Company $...
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