Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of income will Singh Co. expect?
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Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the
company’s
degree of operating leverage. (2) If sales increase by 15%, what amount of income will Singh
Co. expect?
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- 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 5.7Jakara Company is a service firm with current service revenue of $400,000 and a 40% contribution margin. Its fixed costs are $80,000. Maldives Company has current sales of $6,610,000 and a 45% contribution margin. Its fixed costs are $1,800,000. a. Compute the degree of operating leverage for both companies. Which company will benefit most from a 15% increase in sales? Explain why. b. Illustrate your findings in an Income Statement that is increased by 15%.Singh Co. reports a contribution margin of $996,000 and fixed costs of $747,000. (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of income will Singh Co. expect?
- Company A has current sales of $10, 337, 376 and a 48% contribution margin. Its fixed costs are $2,242,728. Company B is a service firm with a current service revenue of $6,907, 643 and a 18% contribution margin. Company B's fixed costs are $620, 046. Using the degree of operating leverage for Company A, what will be the increase to net income if there was a 21% increase in sales? Round to the hundredth, two decimals.Assuming that the company has a current sales of $120,000 with a 25% margin of safety. Its before-tax return on sales is 6%, and its tax rate is 40%. What is the company's total fixed costs?A company can generate a maximum sales of 825,000 a year. The variable cost ratio to sales is 55% and fixed costs are 128,430 a year. The desired net income for the year is 168,570. At what percentage capacity level should the company operate to realize the desired net income?
- A firm’s contribution margin ratio is 18.4%. If the degree of operating leverage is 15.6 at the $223.1k sales level. Given this information, calculate the firm’s net operating income.Frontier Corp. has a contribution margin of $1,458,000 and profit of $364,500. If sales increase 18%, by how much will profits increase?The following information relates to Zinc Corporation for last year: Sales Revenue ($500,000), Net Operating Income ($25,000) and Degree of Operating Leverage (5). Sales at Zinc are expected to be $600,000 next year. Assuming no change in cost structure, this means that net operating income for next year should be: O a. $45,000 b. $125,000 O c. $30,000 O d. $50,000
- A manufacturer has a monthly fixed cost of $87,500 and a production cost of $15 for each unit produced. The product sells for $20/unit. (a) What is the cost function? CX) (b) What is the revenue function? R(x) - (c) What is the profit function? Px) - (d) Compute the profit (loss) corresponding to production levels of 15,000 and 20,000 units. (Input a negative value to indicate a loss) PL1S,000)- P(20,000) =Information concerning a company's products is as follows: Sales, $300,000; Variable costs, $240,000; Fixed costs, $40,000. Assuming that the company increased sales of the product by 25%, what should the operating income be?Log Co has an operating gearing ratio of 33.33%. Its sales are currently $100m and its operating profit is $20m. Operating gearing is calculated by dividing fixed costs by variable costs. What will its operating profit be if its sales increase by 15%? O $21m O $23m O $27m O $26m