Homework Answers
Change in sales = 9%
Degree of operating leverage = 2.60
Change in operating income = Degree of operating leverage x Change in sales
= 2.60 x 9%
= 23.4%
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Degree of Operating Leverage
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Exercise 9-32 Degree of Operating Leverage (DOL) (LO 9-5] Tasty Kreme 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: Estimated sales in units Unit price Variable cost per unit Total fixed costs TastyKreme Krispy Kake 28,000 27,000 8 8 5 $ 42,000 $81,000 3 Required: 1. Compute the operating income and degree of...
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a) Degree of operating leverage = Contribution margin / profit Degree of operating leverage = 15,600,000...
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1. What is the company’s degree of operating leverage?
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3. Construct a new contribution format income statement for
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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
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15.Assume that the amounts of the company’s total variable
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assume that the total variable expenses are $8,400 and the total
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total sales remain the same, what is the degree of operating...
please complete the entire question, try and use the same format if
possible
Sales for Green Inc. are expected to change by 14%. If Green's degree of operating leverage is 1.30, how much is Green's operating income expected to change? Green's operating income is expected to change by
Exercise 9-32 Degree of Operating Leverage (DOL) (LO 9-5] Tasty Kreme 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: Estimated sales in units Unit price Variable cost per unit Total fixed costs TastyKreme Krispy Kake 28,000 27,000 8 8 5 $ 42,000 $81,000 3 Required: 1. Compute the operating income and degree of...
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2. Using the degree of operating leverage, estimate the impact
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3. Construct a new contribution format income statement for
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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...
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assume that the total variable expenses are $8,400 and the total
fixed expenses are $21,000. Under this scenario and assuming that
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