TODD Candle Co. produces scented candles. Their most recent income statement is as follows: All Amounts...
TODD Candle Co. produces scented candles. Their most recent
income statement is as follows:
All Amounts in Thousands of US $
Revenue $2,400
Variable cost @
$3 per candle 900
Fixed costs 600
Depreciation 400
EBIT 500
Income taxes @ 40% 200
Net Income $300
=====
What is the contribution margin per unit?
What is Accounting Breakeven expressed in number of units
sold?
What is the degree of operating leverage?
Homework Answers
Number of units sold = 900/3 = 300
Contribution margin per unit = (Sales revenue - Variable costs) / sales
= (2400-900)/300
= $5.
Break even units = Fixed cost /Contribution margin per unit
= 600 / 5
= 120 units
Degree of operating leverage = Contribution margin/EBIT
= (2400-900)/500
= 3
COMMENT IF YOU FACE ANY ISSUES
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TODD Candle Co. produces scented candles. Their most recent
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