Please do not give image format and solve all parts Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:Percent ofSales100%40%60%SalesVariable expensesContribution marginFixed expensesNet operating incomeRequired:1. What is the company's degree of operating leverage?2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales.3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Amount$ 96,00038,40057,60046,080$ 11,520Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. (Roundyour intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e.1234 should beentered as 12.34).)Net operating incomeShow Transcribed TextSalesVariable expensesContribution marginFixed expensesNet operating incomeby< Required 1Required 1 Required 2Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:Percent ofSales100%40%60%Amount$ 96,00038,40057,60046,080$ 11,520%SRequired:1. What is the company's degree of operating leverage?2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales.3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.Required 3Required 3 >Complete this question by entering your answers in the tabs below.< Required 2Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.Engberg CompanyContribution Income StatementAmount Percent of Sales%%% Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:Percent ofSales100%40%60%SalesVariable expensesContribution marginFixed expensesNet operating incomeAmount$ 96,00038,40057,60046,080$ 11,520Required:1. What is the company's degree of operating leverage?2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales.3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.Complete this question by entering your answers in the tabs below.Required 1Required 2 Required 3What is the company's degree of operating leverage? (Round your answer to 2 decimal places.)Degree of operating leverageRequired 1Required 2 >

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Engberg Company installs lawn sod in home yards. The company's Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Amount $ 96,000 38,400 57,600 46,000 $ 11,520 Percent of Sales 100% 40% 60%

Engberg Company installs lawn sod in home yards. The company's Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Amount $ 96,000 38,400 57,600 46,000 $ 11,520 Percent of Sales 100% 40% 60%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9PB: Fire Company is a service firm with current service revenue of $900,000 and a 40% contribution...

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Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
Fire Company is a service firm with current service revenue of $900,000 and a 40% contribution margin. Its fixed costs are $200,000. Ice Company has current sales of $420,000 and a 30% contribution margin. Its fixed costs are $90,000. What is the margin of safety for Fire and Ice? Compare the margin of safety in dollars between the two companies. Which is stronger? Compare the margin of safety in percentage between the two companies. Now which one is stronger? Compute the degree of operating leverage for both companies. Which company will benefit most from a 10% increase in sales? Explain why. Illustrate your findings in an Income Statement that is increased by 10%.
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Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
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Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?