The following CVP income statements are available for Cullumber Corp. and Ivanhoe, Inc.CullumberIvanhoe, Inc.Corp.Sales revenue$742,000$742,000Variable costs371,000225,250Contribution margin371,000516,750Fixed costs238,500384,250Net income$132,500$132,500(a)Your answer is correct.Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g.15.5.)Degree ofOperating LeverageCullumber2.8Ivanhoe3.9eTextbook and MediaAssistance UsedAttempts: 2 of 5 used(b)Assume that sales revenue decreases by 20%. Prepare a CVP income statement for each company. (Do notround intermediate calculations.)Cullumber Corp.Ivanhoe , Inc.2$$2$$<>(><>

COST VOLUME ANANLYSIS is used to do analysis of how changes that has took place in cost and volume…

he following CVP income statements are available for Cullumber Corp. and Ivanhoe Cullumber Ivanhoe, Inc. Corp. Sales revenue $742,000 $742,000 Variable costs 371,000 225,250 Contribution margin 371,000 516,750 Fixed costs 238,500 384,250 Net income $132,500 $132,500

he following CVP income statements are available for Cullumber Corp. and Ivanhoe Cullumber Ivanhoe, Inc. Corp. Sales revenue $742,000 $742,000 Variable costs 371,000 225,250 Contribution margin 371,000 516,750 Fixed costs 238,500 384,250 Net income $132,500 $132,500

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 6PB: Using the information for Lighthizer Trading Company, prepare the income statement to include all...

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Question

The following CVP income statements are available for Cullumber Corp. and Ivanhoe, Inc.
Cullumber
Ivanhoe, Inc.
Corp.
Sales revenue
$742,000
$742,000
Variable costs
371,000
225,250
Contribution margin
371,000
516,750
Fixed costs
238,500
384,250
Net income
$132,500
$132,500
(a)
Your answer is correct.
Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g.
15.5.)
Degree of
Operating Leverage
Cullumber
2.8
Ivanhoe
3.9
eTextbook and Media
Assistance Used
Attempts: 2 of 5 used
(b)
Assume that sales revenue decreases by 20%. Prepare a CVP income statement for each company. (Do not
round intermediate calculations.)
Cullumber Corp.
Ivanhoe , Inc.
2$
$
2$
$
<>
(>
<>

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