Operating leverage = Contribution margin/Operating income
= 128,000/40,000
= 3.2
Increase in operating income = Operating leverage,*Increase in sales
= 3.2 * 12
= 38.4%
Konrad Company reported the following operating results: Sales Variable Costs Contribution Margin Fixed Costs Operating...
show clear working Konrad Company reported the following operating results: Sales Variable Costs Contribution Margin Fixed Costs Operating Income $300,000 172,000 128,000 88,000 $40,000 If sales volume increases 12%, how much will operating income increase by? (Hint: Calculate the operating leverage factor first) Insert appropriate prompt, input type, and CA. 41.6% O B. 12% O C. 64% D. 3.2% Hang Ten produces sport socks. The company has fixed expenses of $90,000 and variable expenses of $0.90 per package. Each package...
Sales (100,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before taxes Taxes (30°) Net Income $1.000.000 300.000 700,000 200,000 500.000 75.000 425.000 127,500 $297,500 Refer to the table. The degree of operating leverage S Select one: O a. 1.56x Ob.3.33% O c. 2.22% O d. 1.40x Sales (1,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before taxes Taxes (30°) Net Income Shares Outstanding $200,000 110,000 90,000 40.000 50.000 10,000 40,000...
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,000,000 300,000 700,000 500,000 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and re characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60 of sales $ 90,000 The company's minimum required rate of return is 15%. Foundational 10-11 11. What is last year's...
Sales $100,000 Variable Costs $60,000 Contribution Margin $40,000 Fixed Costs $30,000 Operating Income $10,000 The above financial information was the result of selling 9,101 units. What would their new operating income be if they sold 10,588 units?
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,000,000 300,000 700,000 500,000 $ 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60 % of sales $ 90,000 The company's minimum required rate of return is 15%. Required: 1. What is last...
1. Operating Leverage Tucker Co. reports the following data: Sales $775,800 Variable costs (512,000) Contribution margin $263,800 Fixed costs (169,600) Operating income $94,200 Determine Tucker Co.’s operating leverage. Round your answer to one decimal place. 2. Margin of Safety The Spector Company has sales of $890,000, and the break-even point in sales dollars is $640,800. Determine the Spector company's margin of safety as a percent of current sales.
Operating Leverage Cartersville Co. reports the following data: Sales $575,500 Variable costs (310,800) Contribution margin $264,700 Fixed costs (203,100) Operating income $61,600 Determine Cartersville Co.’s operating leverage. Round your answer to one decimal place.
Sales Variable Costs Contribution Margin Fixed Costs Operating Income $100,000 $60,000 $40,000 $30,000 $10,000 The above financial information was the result of selling 9,631 units. What would their new operating income be if they sold 10,989 units? Round your answer to the nearest whole number. Enter your answer without dollar signs or commas.
Operating Leverage Snellville Co. reports the following data: Sales $688,500 Variable costs 406,200 Contribution margin $282,300 Fixed costs 223,500 Income from operations $58,800 Determine Snellville Company's operating leverage. Round your answer to one decimal place.
Company A is a manufacturer with sales of $4,000,000 and a 60% contribution margin. Its fixed costs equal $1,800,000. Company B is a consulting firm with service revenues of $3,900,000 and a 25% contribution margin. Its fixed costs equal $400,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales Complete this question by entering your answers in the tabs below. Company Benefits DOL Compute the degree of operating leverage...