SURVEY OF ACCOUNTING 360DAY CONNECT CAR
5th Edition
ISBN: 9781260591811
Author: Edmonds
Publisher: MCG
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Question
Chapter 11, Problem 16E
a)
To determine
Calculate the magnitude of operating leverage using contribution margin approach.
b)
To determine
Determine the amount of net income which K Company will earn if the revenue increases by 10%. The sale price is not affected.
c)
To determine
Construct an income statement and the percentage change in net income of two income statement.
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Question 2: Harry Company manufactures and sells steel chairs. The company’s contribution format income statement for the most recent year is given below:
Sales (9,000 units)
$162,000
Variable expense
90,000
Contribution margin
72,000
Fixed expense
40,000
Net operating profit
32,000
Requirement
Calculate the variable ratio
Compute the company’s degree of operating leverage at the present level of
How many units must be sold to achieve a target profit of $8,000 and interpret your
What is the revised net operating income if variable expense decreased by $2 per unit and the number of units sold increased by 20%?
Question 3Success Sdn Bhd sells lorries. During the current year, 100 lorries were sold resulting in RM820,000 of sales revenue, RM250,000 of variable costs, and RM342,000 of fixed costs.
Required:
Calculatea. the number of lorries that must be sold to achieve RM300,000 of operating income.
b. the contribution margin at the breakeven point of 2,000 units, variable costs total RM4,000 and fixed costs total RM6,000.
c. Explain the term breakeven point.
Question 3
Success Sdn Bhd sells lorries. During the current year, 100 lorries were sold resulting in RM820,000 of sales revenue, RM250,000 of variable costs, and RM342,000 of fixed costs.
Required:
Calculate
The number of lorries that must be sold to achieve RM300,000 of operating income.
The contribution margin at the breakeven point of 2,000 units, variable costs total RM4,000 and fixed costs total RM6,000.
Explain the term breakeven point.
Chapter 11 Solutions
SURVEY OF ACCOUNTING 360DAY CONNECT CAR
Ch. 11 - 1.Define fixed cost and variable cost and give an...Ch. 11 - Prob. 2QCh. 11 - 3.Define the term operating leverage and explain...Ch. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - 6.If volume is increasing, would a company benefit...Ch. 11 - Explain the risk and rewards to a company that...Ch. 11 - 9.Are companies with predominately fixed cost...Ch. 11 - 10.How is the relevant range of activity related...Ch. 11 - Which cost structure has the greater risk?...
Ch. 11 - 14.The president of Bright Corporation tells you...Ch. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Exercise 2-4A Determining total variable cost The...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prepare an income statement using the contribution...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Problem 2-19A Context-sensitive nature of cost...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 1ATCCh. 11 - Prob. 2ATCCh. 11 - Prob. 3ATCCh. 11 - Prob. 4ATCCh. 11 - Prob. 5ATC
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