QS 18-22 (Algo) Computing and analyzing operating leverage LO A2 Singh Company reports a contribution margin of $940,000 and fixed costs of $705,000. (1) Compute its income. (2) Compute its degree of operating leverage. (3) If sales increase by 15%, what amount of income is expected? 1. Income 2. Degree of operating leverage

QS 18-22 (Algo) Computing and analyzing operating leverage LO A2 Singh Company reports a contribution margin of $940,000 and fixed costs of $705,000. (1) Compute its income. (2) Compute its degree of operating leverage. (3) If sales increase by 15%, what amount of income is expected? 1. Income 2. Degree of operating leverage

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 22MC: If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month,...

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Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $238,500 $728,000 Variable costs 95,700 436,800 Contribution margin $142,800 $291,200 Fixed costs 100,800 179,200 Income from operations $42,000 $112,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. ______________ Bryant Inc. ______________ b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $____________ ______________ % Bryant Inc. $___________ ______________ %
Required Information of 15 The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: $2,300,000 Sales Variable expenses Contribution margin Fixed expenses 1,630, 000 24 460,000 $41,437,500 Net operating income erInt Average operating assets At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 460,000 se% of sales $ 161,000 The company's minimum required rate of return is 15%. Required: 1 What is last year's margin? Prev 15 of 15 Nex てし Type here to search ye. 近 (6) F4 F5 F7 F8
Exercise 18-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The company's annual fixed costs are $916,400. Management targets an annual income of $1,450,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = || = = || Units to Achieve Target Units to achieve target 0 Dollars to Achieve Target Dollars to achieve target 0
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $355,700 $950,000 Variable costs 142,700 570,000 Contribution margin $213,000 $380,000 Fixed costs 142,000 190,000 Income from operations $71,000 $190,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $275,600 $882,000 Variable costs 110,600 529,200 Contribution margin $165,000 $352,800 Fixed costs 110,000 205,800 Income from operations $55,000 $147,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. 3 Bryant Inc. 2.4 b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Вeck Inc. 55,000 x 55 X % Bryant Inc. 147,000 x 14.7 X % c. The difference in the increases of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher operating leverage means that its fixed costs are a larger percentage of contribution margin than are Bryant Inc.'s.
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Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $341,300 $1,072,500 Variable costs 136,900 643,500 Contribution margin $204,400 $429,000 Fixed costs 131,400 234,000 Income from operations $73,000 $195,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2 b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank fill in the blank % Bryant Inc. $fill in the blank fill in the blank % c. The difference in the fill in the blank of income from operations is due to the difference in the operating leverages. Beck Inc.'s fill in the blank operating leverage means that its fixed costs are a fill in the blank…
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $341,300 $1,072,500 Variable costs 136,900 643,500 Contribution margin $204,400 $429,000 Fixed costs 131,400 234,000 Income from operations $73,000 $195,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. 2.8 Bryant Inc. 2.2 b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank 42 % Bryant Inc. $fill in the blank 33 %
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