bluow CROS EXERCISE 9: LEVERAGE CALCULATIONS Use the following information to calculate the company's operating leverage, finan- cial leverage, and combined leverage: Sales volume Price per unit Variable costs (per unit) Fixed costs Interest Corporate income tax rate 100,000 units $11.30 moll $ 8.30 $100,000 $ 25,000 40% 3200

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter11: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11.16E
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he words a
Sudi
Use the following information to calculate the company's operating leverage, finan-
ada bus EXERCISE 9: LEVERAGE CALCULATIONS
brob
cial leverage, and combined leverage:
Sales volume
Price per unit
Variable costs (per unit)
Fixed costs
Interest
Corporate income tax rate
100,000 units
11.30 moll
8.30
si diwory on
$
$
$100,000
$ 25,000
40%
EXERCISE 10: LEVERAGE CALCULATIONS
Using the data in Exercise 9, assume that the company wants to make its plant more
automated and is able to reduce the variable costs to $7.30 per unit, increase the fixed
costs by $100,000 (i.e., to $200,000), and increase the finance costs from $25,000 to
$35,000.
Issigns
Question 6: COST OF CAPITALA
ENT
Calculate the new operating leverage, financial leverage, and combined leverage.
Transcribed Image Text:he words a Sudi Use the following information to calculate the company's operating leverage, finan- ada bus EXERCISE 9: LEVERAGE CALCULATIONS brob cial leverage, and combined leverage: Sales volume Price per unit Variable costs (per unit) Fixed costs Interest Corporate income tax rate 100,000 units 11.30 moll 8.30 si diwory on $ $ $100,000 $ 25,000 40% EXERCISE 10: LEVERAGE CALCULATIONS Using the data in Exercise 9, assume that the company wants to make its plant more automated and is able to reduce the variable costs to $7.30 per unit, increase the fixed costs by $100,000 (i.e., to $200,000), and increase the finance costs from $25,000 to $35,000. Issigns Question 6: COST OF CAPITALA ENT Calculate the new operating leverage, financial leverage, and combined leverage.
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