Calculate operating leverage, financial leverage and combined leverage under situation 1 and 2 in financial plans A & B from the following information relating to the operation and capital structure of a company. Installed capacity 2,000 units Actual production and sales 50% of the capacity Selling price P20 per unit Variable Cost P10 per unit Fixed Cost: Under Situation I P4,000 Under Situation II P 5,000 Capital Structure: Financial Plan A B Equity P5,000 P15,000 Debt (Rate of Interest 10%) 15,000 5,000
Calculate operating leverage, financial leverage and combined leverage under situation 1 and 2 in financial plans A & B from the following information relating to the operation and capital structure of a company. Installed capacity 2,000 units Actual production and sales 50% of the capacity Selling price P20 per unit Variable Cost P10 per unit Fixed Cost: Under Situation I P4,000 Under Situation II P 5,000 Capital Structure: Financial Plan A B Equity P5,000 P15,000 Debt (Rate of Interest 10%) 15,000 5,000
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 3PA: The income statement comparison for Forklift Material Handling shows the income statement for the...
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- Calculate operating leverage, financial leverage and combined leverage under situation 1 and 2 in financial plans A & B from the following information relating to the operation and capital structure of a company.
Installed capacity 2,000 units
Actual production and sales 50% of the capacity
Selling price P20 per unit
Variable Cost P10 per unit
Fixed Cost:
Under Situation I P4,000
Under Situation II P 5,000
Capital Structure:
|
Financial Plan |
|
|
A |
B |
Equity |
P5,000 |
P15,000 |
Debt (Rate of Interest 10%) |
15,000 |
5,000 |
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