If the contribution margin ratio is 0.60, targeted operating income is $55,000, and fixed costs are $90,000, then sales volume in dollars is ________.
$150,000 |
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$91,667 |
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$362,500 |
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$241,667 |
Blistre Company operates on a contribution margin of 40% and currently has fixed costs of $530,000. Next year, sales are projected to be $3,200,000. An advertising campaign is being evaluated that costs an additional $110,000. How much would sales have to increase to justify the additional expenditure?
$1,280,000 |
||
$165,000 |
||
$275,000 |
||
$530,000 |
________ is the process of varying key estimates to identify those estimates that are the most critical to a decision.
The graph method |
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A sensitivity analysis |
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The degree of operating leverage |
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Sales mix |
1 | ||
Targeted operating income | 55000 | |
Add: Fixed costs | 90000 | |
Contribution margin | 145000 | |
Sales volume in dollars | 241667 | =145000/0.6 |
Option D $241,667 is correct | ||
2 | ||
Advertising expense | 110000 | |
Divide by contribution margin ratio | 40% | |
Sales to increase | 275000 | |
Option C $275,000 is correct |
3
A sensitivity analysis is the process of varying key estimates to identify those estimates that are the most critical to a decision. |
A sensitivity analysis involves changing key estimates to identify the effect of changes on various elements. |
Option B A sensitivity analysis is correct |
If the contribution margin ratio is 0.60, targeted operating income is $55,000, and fixed costs are $90,000, then sales...
Blistre Company operates on a contribution margin of 40% and currently has fixed costs of $530,000. Next year, sales are projected to be $3,200,000. An advertising campaign is being evaluated that costs an additional $110,000. How much would sales have to increase to justify the additional expenditure? $530,000 $1,280,000 $165,000 $275,000
Blistre Company operates on a contribution margin of 40% and currently has fixed costs of $520,000. Next year, sales are projected to be $3,400,000. An advertising campaign is being evaluated that costs an additional $110,000. How much would sales have to increase to justify the additional expenditure? O A. $1,360,000 OB. $275,000 OC. $520,000 OD. $165,000
If the contribution margin ratio is 0.40, targeted operating income is $95,000, and targeted sales volume in dollars is $520,000, then the degree of operating leverage is ________. 3.28 times 0.46 times 1.50 times 2.19 times Sales of Blistre Autos are 350,000, variable cost is 210,000, fixed cost is 90,000 tax rate is 40%. Calculate the operating leverage of the company. 1.50 times 2.80 times 4.67 times 1.80 times Tony Manufacturing produces a single product that sells for $80. Variable...
If the contribution margin ratio is 0.60, targeted operating income is $100,000, and targeted sales volume in dollars is $500,000, then the degree of operating leverage is ________. 3.00 times 0.67 times 0.33 times 2.00 times
When a greater proportion of costs are fixed costs, then ________. a decrease in sales reduces the total fixed cost per unit a small increase in sales results in a small decrease in operating income when demand is low the risk of loss is high a decrease in sales reduces the cost per unit Blistre Company operates on a contribution margin of 20% and currently has fixed costs of $530,000. Next year, sales are projected to be $3,000,000. An advertising...
If the contribution margin ratio is 0.45, targeted operating income is $95,000, and targeted sales volume in dollars is $550,000, then the degree of operating leverage is ________. A. 2.61 times B. 3.18 times C. 1.22 times D. 0.38 times
11. If the contribution margin ratio is 0.40, targeted operating income is $80,000, and targeted sales volume in dollars is $500,000, then the degree of operating leverage is: A) 1.50 times B) 2.00 times C) 2.50 times D) 3.00 times
If the contribution margin ratio 1 0.25 targeted operating income is $25,000, and targeted sales volume in dollars is \$200,000 , then total fixed costs are what : $75.000 525,000 $100,000 \$50,000
If the contribution margin ratio is 0.25, targeted operating income is $50,000, and targeted sales volume in dollars is $260,000, then total fixed costs are Select one: O A. $157,500 O B. $35,000 O C. $15,000 O D. $210,000
Question 13 1.5 If the contribution margin ratio is 0.40, targeted operating income is 595,000, and targeted sales volume in dollars is 5520,000, then the degree of operating leverage is 1.50 times 0.46 times 3.28 times 2.19 times