Calculating Target Profit, Margin of Safety, Degree of Operating Leverage
Refer to the information regarding Peggy’s Ribbon World in E6-8.
Required:
1.Suppose Peggy’s would like to generate a profit of $800. Determine how many rosettes it must sell to achieve this target profit.
2.If Peggy’s sells 1,100 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales.
3.Calculate Peggy’s degree of operating leverage if it sells 1,100 rosettes.
4.Using the degree of operating leverage, calculate the change in Peggy’s profit if it raises the sales price of each rosette by $0.50. (Assume costs do not change.)
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.