Homework Answers
| The statement is false which is shown as below:- | |||||||
| Operating leverage = (%change in operating income/ % change in sales) | |||||||
| = | 5 = %change in operating income / 45% | ||||||
| = | %change in operating income = (45*5) = 225% | ||||||
| Hence, change in operating income is (20,000*225%) = $45,000 | |||||||
Add Answer to:
The degree of operating leverage for Williams Company is 5. The actual operating income is $20,000....
The degree of operating leverage for Madrigal Company is 3. The actual operating income is $23,000....
The degree of operating leverage for Madrigal Company is 3. The actual operating income is $23,000. If the company expects 45% increase in sales, operating income should increase by $10,350. True or False
1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage,...
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 18% increase in sales.
3. Construct a new contribution format income statement for
the company assuming a 18% increase in sales.
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 143.000 57,200 85,800 21,000...
Degree of Operating Leverage
Exercise 9-32 (Static) Degree of Operating Leverage (DOL) [LO 9-5]TastyKreme and Krispy Kake are both producers of baked goods, but each has followed a different production strategy. The differences in their strategies resulted in differences in their cost structure, as shown in the following table: TastyKremeKrispy KakeEstimated sales in units20,00015,000Unit price6.008.00Variable cost per unit3.003.00Total fixed costs$ 30,000$ 45,000 Required:1. Compute the operating income and degree of operating leverage for each company. (Round "Degree of operating leverage" to 1 decimal place.)2. Assuming sales volume for...
13.What is the degree of operating leverage? 14.Using the degree of operating leverage, what is the...
13.What is the degree of operating leverage?
14.Using the degree of operating leverage, what is the
estimated percent increase in net operating income of a 5% increase
in sales?
15.Assume that the amounts of the company’s total variable
expenses and total fixed expenses were reversed. In other words,
assume that the total variable expenses are $8,400 and the total
fixed expenses are $21,000. Under this scenario and assuming that
total sales remain the same, what is the degree of operating...
13.What is the degree of operating leverage? 14.Using the degree of operating leverage, what is the...
13.What is the degree of operating leverage?
14.Using the degree of operating leverage, what is the
estimated percent increase in net operating income of a 5% increase
in sales?
15.Assume that the amounts of the company’s total variable
expenses and total fixed expenses were reversed. In other words,
assume that the total variable expenses are $8,400 and the total
fixed expenses are $21,000. Under this scenario and assuming that
total sales remain the same, what is the degree of operating...
Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Chillmax Company had...
Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Chillmax Company had planned to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 3,500 units sold is $58,500. The degree of operating leverage is 2.3. Now Chillmax expects...
Company A's monthly sales is $100,000 and degree of operating leverage (DOL) is 2. In December, Company A expects that...
Company A's monthly sales is $100,000 and degree of operating leverage (DOL) is 2. In December, Company A expects that sales will reduce by $10,000. What will be the impact of this on Operating Income? Select one: A. Operating Income will reduce by 10% B. Operating Income will increase by 10% C. Operating Income will increase by 20% D. Operating Income will reduce by 20%
Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Head-First Company had...
Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Head-First Company had planned to sell 5,000 bicycle helmets at $72 each in the coming year. Unit variable cost is $53 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 5,000 units sold is $45,500. The degree of operating leverage is 2.1. Now Head-First expects to...
Exercise 5-9 Compute and Use the Degree of Operating Leverage (L05-8] Engberg Company installs lawn sod...
Exercise 5-9 Compute and Use the Degree of Operating Leverage (L05-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $ 80,000 32,000 Percent of Sales 100% 40% 60% Sales Variable expenses Contribution margin Fixed expenses Net operating income 48,000 38,000 $ 10,000 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 5%...
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....
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 18% increase in sales.
3. Construct a new contribution format income statement for
the company assuming a 18% increase in sales.
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 143.000 57,200 85,800 21,000...
13.What is the degree of operating leverage?
14.Using the degree of operating leverage, what is the
estimated percent increase in net operating income of a 5% increase
in sales?
15.Assume that the amounts of the company’s total variable
expenses and total fixed expenses were reversed. In other words,
assume that the total variable expenses are $8,400 and the total
fixed expenses are $21,000. Under this scenario and assuming that
total sales remain the same, what is the degree of operating...
13.What is the degree of operating leverage?
14.Using the degree of operating leverage, what is the
estimated percent increase in net operating income of a 5% increase
in sales?
15.Assume that the amounts of the company’s total variable
expenses and total fixed expenses were reversed. In other words,
assume that the total variable expenses are $8,400 and the total
fixed expenses are $21,000. Under this scenario and assuming that
total sales remain the same, what is the degree of operating...
Company A's monthly sales is $100,000 and degree of operating leverage (DOL) is 2. In December, Company A expects that sales will reduce by $10,000. What will be the impact of this on Operating Income? Select one: A. Operating Income will reduce by 10% B. Operating Income will increase by 10% C. Operating Income will increase by 20% D. Operating Income will reduce by 20%
Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Head-First Company had planned to sell 5,000 bicycle helmets at $72 each in the coming year. Unit variable cost is $53 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 5,000 units sold is $45,500. The degree of operating leverage is 2.1. Now Head-First expects to...
Exercise 5-9 Compute and Use the Degree of Operating Leverage (L05-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $ 80,000 32,000 Percent of Sales 100% 40% 60% Sales Variable expenses Contribution margin Fixed expenses Net operating income 48,000 38,000 $ 10,000 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 5%...
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....
Most questions answered within 3 hours.
-
Lab #2 Address Book Unsorted List (C++)
Using classes, design an online address book to keep...
asked 6 minutes ago -
Tucson Machinery, Inc., manufactures numerically controlled
machines, which sell for an average price of $0.5 million...
asked 22 minutes ago -
Review the referenced paper by Melse (2008). Describe the
research question being addressed. Discuss the methods...
asked 27 minutes ago -
Please do all parts. I don't want to hear your as per guidelines
stuff. Do if...
asked 36 minutes ago -
1. Why is Hardy-Weinberg Theorum important? How can we
test whether a population is in H-W...
asked 37 minutes ago -
A sample of 3 is selected from 9 cards. How many permutation is
possible? Show Work.
asked 50 minutes ago -
Identify a commercial data mining software product (e.g., SAS)
and an open-source data mining product (e.g.,...
asked 53 minutes ago -
Following are the capital account balances for the William,
Jennings, and Bryan partnership:
William (40% of...
asked 44 minutes ago -
An investment project provides cash inflows of $770 per year for
11 years.
a. What is...
asked 53 minutes ago -
About the lecture of human resource management, give me the
process and schedule of how the...
asked 51 minutes ago -
A fair D10 die is rolled 100 times. What is the probability of
rolling five 1s,...
asked 1 hour ago -
Other than hydrogen bonding, what is the major interaction that
causes proteins to fold into compact,...
asked 1 hour ago