Variable expenses were 55% of total sales last year and fixed expenses were 15% of total sales. If the firm increases its selling prices by 12%, but if fixed expenses, variable costs per unit, and unit sales remain unchanged, the effect of the increase in selling price on the company’s operating income (ignoring tax) would be? a. A decrease of 12% b. An increase of 12% c. An increase of 26.67% d. An increase of 40% e. Remains unchanged

Q: A firm sells a single product for ₱80 per unit. The firm’s fixed expenses total ₱320,000 per year.…

A: Here, Fixed Cost is ₱320,000 Selling Price per unit is ₱80 Variable Cost per unit is ₱23  Commission…

Q: A firm sells a single product for ₱100 per unit. The firm’s fixed expenses total ₱500,000 per year.…

A: Selling price (P) = ₱100 Fixed cost (F) = ₱500000 Variable cost (V) = ₱40 Commission (C) = ₱5…

Q: Suppose that a company had a target of 4.000.000 £ of sales revenues and 1.000.000 £ of profits.…

A:

Q: The company produced and sold 14,000 units last year with sales price of $50 per unit and unit…

A: Current profit = (sales price- variable costs) x no. of units sold  - fixed costs =…

Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…

A: 1) Computation of DOL, DFL, DCL is as follows:DOL=Sales -Variable costSales -variable cost-fixed…

Q: Your corporation sells a product for $10 per unit. The variable expenses are $6 per unit, and the…

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

Q: Taylor Company has current sales of 1,000 units, which generates sales revenue of $190,000, variable…

A: Selling price = $190,000 / 1,000 = $190 Unit Variable cost = $76,000 / 1,000 = $76

Q: A company has an operating leverage factor of 4. When its sales increase to P500,000, its profit…

A: solution given Operating leverage 4 Variable cost ratio 40% Fixed cost ?…

Q: Larger Company had originally expected to earn operating income of Php130,000 in the coming year.…

A: Given: Operating income = Php 130,000 Degree of operating leverage = 2.4 Sales growth = 20%

Q: Baker Company has a product that sells for $20 per unit. The variable expenses are $12 per unit, and…

A: Lets understand the basic terms here. Contribution is a sales less variable cost. In other words it…

Q: (Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $140,000 and net…

A: Formulas:

Q: Jakara Company is a service firm with current service revenue of $400,000 and a 40% contribution…

A: In order to determine the degree of operating leverage, the contribution is required to be divided…

Q: Last year Minden Company introduced a new product and sold 25,800 units of it at a price of $95 per…

A:

Q: If sales increase from P80.000 per year to P140,000 per year, and if the operating leverage factor…

A: Calculation of Expected Percentage increase in Net Operating Income if sales increase by 75%…

Q: Dodge Ball Bearings had sales of 12,000 units at $80 per unit last year. The marketing manager…

A: Given: Selling unit last year=12000 unitsSelling price last year =$80 per unitThis year estimated to…

Q: During the current year, the net sales of Ridgeway, Inc., were 10 percent below last year’s level.…

A:

Q: What is your net dollar sales projection for this year?

A: Sales: It represents the amount of money received from the firm's normal operations. Sales are also…

Q: per to $4,600,000 per year. The company's contribution margin ratio is 11%, which means that an…

A: Return on investment is the return expected to be generated from the investment that is made. Return…

Q: Last year, variable expenses were 60% of total sales and fixed expenses were 10% of total sales, If…

A: Contribution Margin   It represents the excess of sales over its variable cost. It judges whether…

Q: (Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $120,000 and net…

A: Degree of Operating Leverage(DOL) shows relationship between Net Operating Income(NOI) and Turnover…

Q: For the past year, Pedi Company had fixed costs of $70,000, unit variable costs of $32, and a unit…

A: Fixed cost = $ 70,000 Selling price = $ 40 Variable cost = $ 32 Contribution per unit = Selling…

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: New sales = Current sales + Current sales x 10% = $11700,000 + $11700,000 x 10% = $12,870,000 New…

Q: Belowis an income statement for NUBD Company P400,000 (120.000) Contribution margin P280,000…

A: The net income is calculated as difference between sales revenue and total costs.

Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…

A: formula for DOL, DFL and DCL DOL=contibutionEBIT=sales - variable costsales - variable cost - fixed…

Q: Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and…

A: Contribution margin ratio = 100% - variable costs as a percentage of sales = 100% - 80% = 20%

Q: Sales volume for a company is million dollars per month. If the company spends $350,000 per month as…

A: The break-even point: The break-even sales or point refers to the level of sales where the…

Q: Tinberg Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined)…

A: In simplest terms, the amount of external funds needed  (EFN) will be equal to the expected increase…

Q: Company XYZ is currently making sales of $200,000. At this level, the variable expenses were…

A: Since the fixed expenses are supposed to remain same even if the sales rises, so the fixed expenses…

Q: Minden Company introduced a new product last year for which it is trying to find an optimal selling…

A:

Q: (Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $140,000 and net…

A: Given, Fixed cost = 140,000 Net operating income =$28,000

Q: Boom Company has sales volume of 70,000 units with a unit selling price of $120 per unit. The…

A: 15. Formula for calculating Degree of Operating Leverage is as follows: Formula = Contribution…

Q: Company will spend 4.5 million on advertising for a new product.  Ads will boost sales by 10.1…

A: Incremental earnings refers to the amount by which the earnings are expected to change due to a…

Q: Coats Corp. generates $10,000,000 in sales.  Its variable costs equal 85 percent of sales and its…

A: Let the interest expense = I EBIT = $1000000 If sales increases by 10%, net income increases by…

Q: 1. Assuming that the fixed costs are expected to remain at 200,000 for the coming year and the sales…

A: Fixed costs are costs that do not change with change in level of activity, but total variable costs…

Q: 1.) refer to the original data. Compute the company's margin of safety in both dollar and percentage…

A: Lets understand the meaning of margin of safety. Margin of safety is a sales over a break even…

Q: What is the company's CM ratio if the companies can sell more units thereby increase sales by…

A: This Numerical has Covered the Concept Of Marginal Cost .

Q: Last year, Garrison Manufacturing sold 500 000 units at $4 each. Sales volume is expected to…

A: Formula used: Sales revenue = Sales units x Sales price per unit.

Q: Last year company A introduced a new product and sold 25,900 units at $97.00 per unit.  The product…

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

Q: Your company’s single product has a selling price of $15 per unit. Last year the company variable…

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

Q: McKee Corporation has annual fixed costs of $12 million. Its variable cost ratio is 0.60.a.…

A: Break-even point: It can be defined as that level of production at which the total costs of the firm…

Q: 3. Assume that sales increase by P400,000 next year If cost behavis patterns remain unchanged, by…

A: Solution:- 2)Computation of Break-even point in units and sales as follows under:-

Q: Company B’s income statement for this year is shown below. Assume that the company’s sales will…

A: If sales increase by 10%, variable expenses will also increase by 10%. So we can just say…

Q: 2. An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…

A: Leverages means leakage of funds. Firm have to pay fixed amount in every period due to which cash…

Q: eakeven sales in units will decrease by 4,000 units, how much will be the increase/decrease in…

A: The breakeven point is where the firm makes no profit or loss . In other words , the contribution…

Q: Last year, variable expenses were 60% of total sales and fixed expenses were 10% of total sales, If…

A:

Cost volume profit (CVP) analysis

CVP analysis is a cost-volume-profit technique of cost accounting that examines the influence of varying levels of expenses and volume on operating profit. Cost Volume Profit analysis determines the relationship between Cost, Sale Volume, sales price, and Profit. CVP analysis is also known as break-even analysis which helps the business organization, banks, and their management to determine and forecast how a change in total sales and cost affects the profit of the organization. CVP analysis helps in financial decision-making for the budget, expense, tax, market investment, and corporate finance and aims at measuring variations in cost and volume.