Operating Leverage Snellville Co. reports the following data: Sales $675,600 Variable costs 432,400 Contribution margin $243,200 Fixed costs 180,800 Income from operations $62,400 Determine Snellville Company's operating leverage. Round your answer to one decimal place.

Operating Leverage Snellville Co. reports the following data: Sales $675,600 Variable costs 432,400 Contribution margin $243,200 Fixed costs 180,800 Income from operations $62,400 Determine Snellville Company's operating leverage. Round your answer to one decimal place.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

See similar textbooks

Related questions

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $341,300…

A: Operating leverage is calculated by dividing the contribution margin by the income from operations.…

Q: Snellville Co. reports the following data: Sales $687,100 Variable costs 474,100 Contribution…

A: Operating leverage = Contribution margin/Net operating income

Q: Operating Leverage Snellville Co.reports the following data: Sales $610,300 Variable costs 335,700…

Q: .Analysis of Cost Structure Spring Company's cost structure is dominated by variable costs with a…

A: A cost structure refers to different sets and relative amounts of variable and fixed expenditures…

Q: Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the…

A: Net income = Contribution margin - Fixed costs = $960,000 - $720,000 = $240,000

Q: The following sales and cost data (in thousands) are for two companies in the transportation…

A: The degree of operating leverage is used to measure how much operating income is sensitive to sales.…

Q: ) Scully Company incurs variable costs of 65% of sales and fixed costs of $276,640. If the company's…

A: Break-even analysis is a technique used widely by the production management. It helps to determine…

Q: Are operating leverage Beck Inc. and Bryant Inc. have the following operating data back Inc. sales…

A: Operating Leverage: It's a metric for determining how resilient net operating income is to a jump in…

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant…

A: Operating leverage is an indicator through which management of a company can able to determine the…

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $346,400…

A: Operating leverage is calculated as contribution margin divided by operating income.

Q: Operating Leverage Westminster Co. reports the following data: Sales $875,000 Variable costs…

A: Operating leverage: Operating leverage is a financial ratio which measures the extent to which the…

Q: Operating Leverage Snellville Co. reports the following data: Sales $483,900 Variable costs 329,100…

A: Degree of Operating Leverage: Degree of operating leverage is an efficiency ratio which evaluates…

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant…

Q: (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of…

A: Contribution is usually defined as Sales minus the variable costs of an organization The degree of…

Q: Degree of operating leverage Grey Products has fixed operating costs of $377,000, variable operating…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Tennill Inc. has a $1,400,000 investment opportunity with the following characteristics: Sales $…

A: Formula: ROI = Turnover x Margin

Q: Operating Leverage Income statements for two different companies in the same industry are as…

Q: Contribution Margin Ratio a. Young Company budgets sales of $900,000, fixed costs of $44,600, and…

A: The contribution margin is computed by subtracting the variable cost from the sale revenue. The…

Q: BR Company has a contribution margin of 15%. Sales are $633,000, net operating income is $94,950,…

A: ROI = Net operating income / Average operating assets

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant…

A: Operating leverage is a cost-accounting formula that determines how much a company or project can…

Q: Wang Co. manufactures and sells a single product that sells for $250 per unit; variable costs are…

A: In order to determine the contribution margin per unit, the variable cost per unit is required to be…

Q: Variable costs as a percentage of sales for Lemon Inc. are 73%, current sales are $647,000, and…

A: Increase in operating income = ( Increase in sales * Contribution margin ratio ) - Increase in fixed…

Q: Jellico Inc.’s projected operating income (based on sales of 450,000 units) for the coming year is…

A: "Since you have posted a question with multiple sub-parts, we will answer first three sub-parts for…

Q: 1. Compute the degree of operating leverage for each company. Trimax ? Quintex ? 2. Compute the…

A: 1. Trimax 120,000/30,000 4 Quintex 240,000/30,000 8 2. Trimax, Inc. 90,000/50% 180,000…

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $347,400…

A: Operating leverage = Contribution margin / Income from operations

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $341,300…

A: Operating leverage is the measure of change in net income of the company with respect to change in…

Q: Kreter, Inc. earned net income of $300,000 last year. This year it wants to earn net income of…

A: Cost-Volume-Profit (CVP) Analysis: It is the technique of managerial accounting that examines how…

Q: Best Sleep Company reported the following results from last year's operations: Sales $ 1,500,000…

A: Net operating income (investment opportunity)=Contribution-Fixed cost=$240,000×70%-$144,000=$24,000

Q: Contribution Margin Ratio a. Imelda Company budgets sales of $1,800,000, fixed costs of $394,000,…

A: Contribution margin = Budgets sales - variable costs = $1,800,000 - $1,116,000 = $684,000

Q: Variable costs as a percentage of sales for Lemon Inc. are 72%, current sales are $610,000. and…

A: Increase (decrease) in income = Increase in Sales x Contribution margin ratio where, Contribution…

Q: Operating Leverage Cartersville Co. reports the following data: Sales $485,800 Variable costs…

A: Formula for calculation of Operating leverage: Operating leverage = Contribution Margin / Income…

Q: Tucker Company reports the following data: Sales $415,400 Variable costs 278,300 Contribution…

A: Operating Leverage = Total Contribution margin / Operating Income

Q: Determine Cartersville Co.’s operating leverage.

A: Operating leverage: It is the ratio that measures the proportion of fixed cost on the total costs…

Q: Morse Company reports total contribution margin of $63,210 and pretax net income of $12,900 for the…

A: Degree of Operating Leverage = Contribution Margin/ Pre-tax Net Income

Q: Degree of Operating Leverage The following sales and cost data (in thousands) are for twocompanies…

A: We have formula for degree of leverage as, Degree of leverage = contribution margin / operating…

Q: Teague Co. reports the following data: Sales $489,300 Variable costs 278,900 Contribution…

A: Solution Formula = Operating leverage = Contribution margin / Operating income.

Q: Variable costs as a percentage of sales for Lemon Inc. are 64%, current sales are $691,000, and…

A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…

Q: Below is an income statement for Howell Company: Sales $600,000 Variable costs (150,000)…

A: The break even sales are the sales where business earns no profit no loss during the period. The…

Q: Operating Leverage Haywood Co. reports the following data: Sales $6,160,000 Variable costs…

Q: Harley Company has sales of $500,000, variable costs are 75% of sales, and income from operations is…

A: Operating leverage is a method of measuring the degree to which a firm can increase its operating…

Q: Calculate the Operating Leverage for a business given the following data: Sales = $300,000.00…

A: The operating leverage is calculated as fixed cost divided by total cost.

Q: Felipe Enterprises reports the following data: Sales $330,000 Variable costs 140,000 Contribution…

A: Total cost=Variable cost+Fixed cost=$140,000+$95,000=$235,000

Q: Consider the following summary modified income statement for Tech Inc.: Sales $593,000 Variable…

A: Degree of operating leverage can be calculated by using this equation. Degree of operating…

Q: The Tom Company reports the following data. Sales $181,203 Variable costs 94,503 Fixed costs 35,700…

A: Contribution margin = Sales - Variable cost Contribution margin = $181,203 - $94,503 Contribution…

Question

Operating Leverage
Snellville Co. reports the following data:
Sales
$675,600
Variable costs
432,400
Contribution margin
$243,200
Fixed costs
180,800
Income from operations
$62,400
Determine Snellville Company's operating leverage. Round your answer to one decimal place.
耳 W
99+)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company Bs fixed costs are $375,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 15% increase in sales? Explain why.
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month, what is their degree of operating leverage? 0.21 1.21 2.4 5.7
Operating leverage Haywood Co. reports the following data: Line Item Description Amount Sales $6,160,000 Variable costs (4,620,000) Contribution margin $1,540,000 Fixed costs (440,000) Operating income $1,100,000 Determine Haywood Co.’s operating leverage. Round your answer to one decimal place.
Operating Leverage Haywood Co. reports the following data: Sales $6,160,000 Variable costs (4,620,000) Contribution margin $1,540,000 Fixed costs (440,000) Operating income $1,100,000 Determine Haywood Co.’s operating leverage. Round your answer to one decimal place.
Operating Leverage Westminster Co. reports the following data: Sales $875,000 Variable costs 425,000 Contribution margin $450,000 Fixed costs 150,000 Income from operations $300,000 Determine Westminster Co.'s operating leverage. Round your answer to one decimal place.
Operating Leverage Cartersville Co. reports the following data: Sales $455,200 Variable costs (250,400) Contribution margin $204,800 Fixed costs (146,300) Operating income $58,500 Determine Cartersville Co.’s operating leverage. Round your answer to one decimal place.
Snellville Co. reports the following data: Sales $687,100 Variable costs 474,100 Contribution margin $213,000 Fixed costs 170,400 Income from operations $42,600 Determine Snellville Company's operating leverage. Round your answer to one decimal place.fill in the blank 1
Teague Co. reports the following data: Sales $489,300 Variable costs 278,900 Contribution margin $210,400 Fixed costs 170,700 Income from operations $39,700 Determine Teague Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1
Tucker Co. reports the following data: Line Item Description Amount Sales $911,900 Variable costs (611,000) Contribution margin $300,900 Fixed costs (219,600) Operating income $81,300 Determine Tucker Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1 of 1
Snellville Co. reports the following data: Line Item Description Amount Sales $673,800 Variable costs (377,300) Contribution margin $296,500 Fixed costs (214,100) Operating income $82,400 Determine Snellville Co.’s operating leverage. Round your answer to one decimal place. fill in the blank 1 of 1