Assuming Orange Company would like to determine its degree of operating leverage, given that the fixed cost is P450,000, the price of their product is P23.00 and the variable cost is P14.00. How many units should be produce to allow the company to earn a profit of P13500?

Suppose you are analyzing a firm that is successfully executing a strategy that differentiates its products from those of its competitors. Because of this strategy, you project that next year the firm will generate 6.0% revenue growth from price increases and 3.0% revenue growth from sales volume increases. Assume that the firms production cost structure involves strictly variable costs. (That is, the cost to produce each unit of product remains the same.) Should you project that the firms gross profit will increase next year? If you project that the gross profit will increase, is the increase a result of volume growth, price growth, or both? Should you project that the firms gross profit margin (gross profit divided by sales) will increase next year? If you project that the gross profit margin will increase, is the increase a result of volume growth, price growth, or both?

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

Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?

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.

A firm has fixed operating costs of R650,000, a sales price per unit of R20,  and a variable cost per unit of R13. At a base sales level of 500,000 units,  what is the firm's degree of operating leverage. (1)

Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000. Calculate the contribution margin percentage. Calculate the selling price if variable costs are $16 per unit. Suppose 75 000 units are sold, calculate the profit earned. Willo the company  beprofitable if able to sell 30,000 units? Explain. What should the company do to increase its profit above break-even point.

Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage.  Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?

Marcus Corporation currently sells 150,000 units of products a year at a price of RM 4.00 per unit. Its variable costs are approximately 30 % of sales, and its fixed costs amount to 50% of revenues at its current output level. Although fixed costs are based on revenues at the current output level, the cost is fixed. What is Marcus' degree of operating leverage in sales (RM)?

The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $117,000 wants to determine the level of output necessary to avoid losses. What level of sales is necessary to break-even if the product is sold for $4.35? Round your answer to the nearest whole number.   units What will be the manufacturer’s profit or loss on the sales of 104,000 units? Round your answer to the nearest dollar. $   If fixed costs rise to $164,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.   units If variable costs decline to $2.25 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.   units If fixed costs were to increase to $164,000, while variable costs declined to $2.25 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number.   units If a major proportion of fixed costs were noncash (depreciation), would…