Am. 121. Current Attempt in ProgressYour answer is partially correct.The single-column CVP income statements shown below are available for Armstrong Company and Contador Company.SalesVariable costsContribution marginFixed costsNet incomeArmstrongContadorSales RevenueVariable CostsArmstrong Co.Contribution MarginFixed Costs$500,000240,000Degree of Operating LeverageNet Income/(Loss)260,000160,000$100,000(a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.)$Contador Co.2.6$4.5(b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-column CVPincome statement for each company.$500,00050,000450,000350,000$100,000Armstrong Company$Contador Company

The degree of operating leverage is calculated as the contribution margin divided by the net income.…

Your answer is partially correct. The single-column CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 Contador (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Contador Co. Degree of Operating Leverage 2.6 4.5 $500,000 50,000 450,000 350,000 $100,000

Your answer is partially correct. The single-column CVP income statements shown below are available for Armstrong Company and Contador Company. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 Contador (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Contador Co. Degree of Operating Leverage 2.6 4.5 $500,000 50,000 450,000 350,000 $100,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 87PSB

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The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company, Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 1000 156,000 $100,000 Blossom Co. Degree of Operating Leverage $495,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ 51,000 444,000 344,000 $100,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. Wildhorse Company $ tA $ Blossom Company
Using the information from BDS Enterprises, prepare the income statement to include all costs, but separate out uncontrollable costs. Insert subtotals where appropriate (include one for operating income) before the uncontrollable costs. Income tax expense should be based on all expenses (that is, it will be the same amount as in question 1). Calculate net income, profit margin, ROI, and RI, excluding uncontrollable expenses. Prepare a short response to accompany the income statement that explains why uncontrollable costs are separated in the income statement.
The following CVP income statements are available for Blanc Company and Noir Company. Sales Variable costs Contribution margin Fixed costs Net income (a1) Blanc Company Noir Company $505,000 $505,000 303,000 252,500 252,500 242,400 $10,100 * Your answer is incorrect. Blanc Company 202,000 191,900 $10,100 Calculate Contribution margin ratio. (Round answers to 2 decimal places, e.g. 0.32.) Noir Company Contribution Margin Ratio 40% 50%
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