Felipe Enterprises reports the following data: Sales $330,000 Variable costs 140,000 Contribution margin $190,000 Fixed costs 95,000 Income from operations $95,000 Determine Felipe Enterprises’s operating leverage.

Felipe Enterprises reports the following data: Sales $330,000 Variable costs 140,000 Contribution margin $190,000 Fixed costs 95,000 Income from operations $95,000 Determine Felipe Enterprises’s operating leverage.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 11P

See similar textbooks

Related questions

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $341,300…

A: Operating leverage is calculated by dividing the contribution margin by the income from operations.…

Q: Income statements for two different companies in the same industry are as follows:…

A: Answer 1) Calculation of Degree of Operating Leverage Degree of Operating Leverage = Operating…

Q: Operating Leverage Snellville Co.reports the following data: Sales $610,300 Variable costs 335,700…

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $355,700…

A: Operating leverage formula:-

Q: Tom Company reports the following data: Sales $600,000 Variable costs…

A: Sales = $ 600,000 Variable cost = $ 400,000 Fixed cost = $ 120,000 Contribution = Sales-Variable…

Q: Spring Company’s cost structure is dominated by variable costs with a contribution margin ratio of…

A: Fixed cost means the cost which do not vary with the level of output. Variable cost means the cost…

Q: Are operating leverage Beck Inc. and Bryant Inc. have the following operating data back Inc. sales…

A: Operating Leverage: It's a metric for determining how resilient net operating income is to a jump in…

Q: Appliance Company makes cooling fans. The firm’s income statement is as follows: Sales (7,000 fans…

A: Operating Leverage: Increasing operating income by increasing revenue is a cost-accounting formula…

Q: Company A has current sales of $4.000.00 and a 45% contribution margin. Its fixed costs are…

A: Formula: Degree of operating leverage = Total Contribution margin / net income

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $346,400…

A: Operating leverage is calculated as contribution margin divided by operating income.

Q: Given the following financial data for Cosmos, compute the firm's degree of combined leverage.…

A: Combined leverage is a leverage combination of both operating and financial leverage. It refers to…

Q: Operating Leverage Snellville Co. reports the following data: Sales $675,600 Variable costs 432,400…

A: Operating leverage of the business due to change in sales revenue, how much income of the business…

Q: Operating Leverage Income statements for two different companies in the same industry are as…

A: Degree of operating leverage is calculated as: = Contribution Margin / Operating Income Break - even…

Q: Operating Leverage Westminster Co. reports the following data: Sales $875,000 Variable costs…

A: Operating leverage: Operating leverage is a financial ratio which measures the extent to which the…

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant…

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $238,500…

A: Degree of Operating leverage: It is a financial ratio. Sensitivity of operating income to sales is…

Q: Management anticipates fixed costs of $73,000 and variable costs equal 47% of sales. What will…

A: Variable cost is the required cost that changes with the change in level of output. Fixed cost…

Q: Operating Leverage Income statements for two different companies in the same industry are as…

Q: The degree of operating leverage (DOL) is ___

A: Degree of Operating Leverage: It measures the change in the operating income in response to the…

Q: Contribution Margin Ratio a. Young Company budgets sales of $900,000, fixed costs of $44,600, and…

A: The contribution margin is computed by subtracting the variable cost from the sale revenue. The…

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant…

A: Degree of operating leverage means the division of contribution with operating income. Variable cost…

Q: a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal…

A: Leverage can be commonly measured into 3 kinds, namely Operating Leverage (OL) Financing Leverage…

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $326,000…

A: Operating leverage: It is calculated by dividing the contribution margin by the operating income of…

Q: Based on the below data, compute for the Degree of Operating Leverage: Sales…

A: The degree of operating leverage can be calculated by dividing total contribution by earning before…

Q: Based on the income statements shown below, which division has the cost structure with the highest…

A: FORMULA FOR OPERATING LEVERAGE - operating leverage = contribution margin / net operating income

Q: Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $347,400…

A: Operating leverage = Contribution margin / Income from operations

Q: Raines Company's sales are $940,000 with operating profits of $168,000. If the contribution margin…

A: The term “operating profit” refers to an accounting metric measuring the profits a company generates…

Q: Breakeven point-Algebraic and graphical Fine Leather Enterprises sells its single product for…

A: The operating can be calculated using the given fixed costs, sales per unit, and variable costs.

Q: The sales and cost data for two companies in the transportation industry are as follows: X Company…

A: For X Company: Annual Break-even point in sales dollars = Fixed cost/Contribution margin ratio =…

Q: Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of…

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

Q: Operating Leverage Cartersville Co. reports the following data: Sales $485,800 Variable costs…

A: Formula for calculation of Operating leverage: Operating leverage = Contribution Margin / Income…

Q: Determine Cartersville Co.’s operating leverage.

A: Operating leverage: It is the ratio that measures the proportion of fixed cost on the total costs…

Q: Degree of Operating Leverage The following sales and cost data (in thousands) are for twocompanies…

A: We have formula for degree of leverage as, Degree of leverage = contribution margin / operating…

Q: Teague Co. reports the following data: Sales $489,300 Variable costs 278,900 Contribution…

A: Solution Formula = Operating leverage = Contribution margin / Operating income.

Q: Contribution Margin Ratio a. Young Company budgets sales of $950,000, fixed costs of $55,600, and…

A: a. Calculation of contribution margin ratio: Therefore, the contribution margin ratio is 74%.…

Q: Use the below information to answer the following question. Sales (1,000 units) $…

A: The degree of financial leverage (DFL) is a leverage ratio that determines how sensitive a…

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant…

A: Operating leaverage = Contribution / Operating profit

Q: Compute the Magnitude of Operating Leverage for the following company: Sales $900,000 Variable Costs…

A: Operating leverage = Contribution margin / Income from operations

Q: Operating Leverage Haywood Co. reports the following data: Sales $6,160,000 Variable costs…

Q: Cost Volume Profit Total Company produces one type of machine with the following costs and…

A: a. The Break-even point represents the point where the amount of total cost is equal to the amount…

Q: The sales and cost data for two companies in the transportation industry are as follows: X…

A: Degree of Operating Leverage (DOL) = (Sales - Variable Cost) / Operating Income = Contribution /…

Q: Calculate the Operating Leverage for a business given the following data: Sales = $300,000.00…

A: The operating leverage is calculated as fixed cost divided by total cost.

Q: Cost Volume Profit Total Company produces one type of machine with the following costs and…

A: Operating Profit is the profit that company earns after reducing the operating expenses from gross…

Q: Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc.…

Q: Operating leverage Beck Inc. and Bryant Inc.have the following operating data: Beck…

A: Operating leverage is the one that is calculated to measure the level to which the income can be…

Q: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are…

A: Degree of operating leverage (DOL): DOL Reflects an organization's variable and fixed cost…

Question

Operating Leverage

Felipe Enterprises reports the following data:

Sales	$330,000
Variable costs	140,000

Contribution margin	$190,000
Fixed costs	95,000

Income from operations

$95,000

Determine Felipe Enterprises’s operating leverage.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

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.
Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
Operating Leverage Westminster Co. reports the following data: Sales $875,000 Variable costs 425,000 Contribution margin $450,000 Fixed costs 150,000 Income from operations $300,000 Determine Westminster Co.'s operating leverage. Round your answer to one decimal place.
Operating Leverage Haywood Co. reports the following data: Sales $6,160,000 Variable costs (4,620,000) Contribution margin $1,540,000 Fixed costs (440,000) Operating income $1,100,000 Determine Haywood Co.’s operating leverage. Round your answer to one decimal place.
Operating leverage Haywood Co. reports the following data: Line Item Description Amount Sales $6,160,000 Variable costs (4,620,000) Contribution margin $1,540,000 Fixed costs (440,000) Operating income $1,100,000 Determine Haywood Co.’s operating leverage. Round your answer to one decimal place.
Teague Co. reports the following data: Sales $489,300 Variable costs 278,900 Contribution margin $210,400 Fixed costs 170,700 Income from operations $39,700 Determine Teague Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $325,700 $1,000,000 Variable costs 130,700 600,000 Contribution margin $195,000 $400,000 Fixed costs 120,000 200,000 Income from operations $75,000 $200,000 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 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 % 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…
Operating Leverage Cartersville Co. reports the following data: Sales $455,200 Variable costs (250,400) Contribution margin $204,800 Fixed costs (146,300) Operating income $58,500 Determine Cartersville Co.’s operating leverage. Round your answer to one decimal place.
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.
Calculate the Operating Leverage for a business given the following data: Sales = $300,000.00 Variable Costs = 75% of Sales Operating Income = $40,000.00 Group of answer choices a. 0 b. 7.500 c. 1.875 d. 1.333
Tucker Co. reports the following data: Line Item Description Amount Sales $911,900 Variable costs (611,000) Contribution margin $300,900 Fixed costs (219,600) Operating income $81,300 Determine Tucker Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1 of 1
Tom Company reports the following data: Sales $600,000 Variable costs 400,000 Fixed costs 120,000 Determine Tom Company’s operating leverage.