Solemn Company has an operating leverage of 2,0. Sales for the current year are $100,000 with a contribution margin of $50,000. Sales are expected to be $150,000 next year. Operating income for the current year can be expected to increase by what amount over the previous year? $25,000 O None of the above $75,000 $50,000
Q: The profit for the year of Garena Ltd. works out to 12.5% of the capital employed and the relevant…
A: Marginal costing is an costing method and it is the variable cost of one unit of a product. Marginal…
Q: Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the…
A: Net income = Contribution margin - Fixed costs = $960,000 - $720,000 = $240,000
Q: Last year Minden Company Introduced a new product and sold 25100 units of It at a price of $95 per…
A: Note: Since we only answer up to 3 sub parts, first three subparts will be answered. Please resubmit…
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: Hebner Housing Corporation has forecast the following numbers for this upcoming year: Sales =…
A: Net Income refers to gross income remained of an entity after deducting of all the desired expenses…
Q: A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to…
A: Break-even is the point wherein the company is in a situation of no profit no loss.
Q: Neeley Grocery has a monthly target operating income of $25,000. Variabe expenses are 20% of sales…
A: Compute the Neeley Grocery's operating leverage factor at the target level of operating income:…
Q: red: Construct the company’s contribution approach income statement and determine the net income of…
A: To construct the company’s contribution approach income statement and determine the net income of…
Q: XYZ Company's single product has a selling price of $15 per unit. The fixed expenses were $120,000.…
A: Profit increases with the increase in sales revenue. Here, sales are increased by 10%, so profits…
Q: Firm R has sales of 100,000 units at $2 per unit, variable operating costs of $1.70 per unit, and…
A: Operating Leverage = Contribution margin / Operating Income Finance leverage = Operating income /…
Q: Bulldogs Inc. forecasted the following data for 2022. · Forecasted unit sales is 20,000. ·…
A: Given: Particulars Amount Sales units 20000 Selling price 25 Contribution margin ratio 40%…
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: A company has a total fixed cost of 500.000 TL and produced 1.000.000 TL of profit this year. What…
A: The net income is the net profit of the company earned during the period. The net income includes…
Q: A company expects to sell 30,000 units of a product next year. Variable production cost is ₱25 and…
A: Units = 30,000 Selling price = P Sales = 30000*P = 30000P Variable cost = P 25 Variable cost =…
Q: Zira Ltd sells mobile gadgets for 15 each. The gadgets have a variable cost of 4 per unit, and…
A: Formula: Break even point in units = Fixed cost / Unit contribution margin
Q: firm provided the following data for the year: Selling price per unit→ ₱45; Variable production cost…
A:
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: Company XYZ is currently operating with a 65% contribution margin. The company is planning an…
A: Increase in contribution margin = Increase Sales x contribution margin ratio = $10000 x 65% = $6500
Q: Jely Company manufactures a single product. In the prior year, the company had sales of P90,000,…
A: Variable cost changes with the changing level of activities i.e. higher the production more will be…
Q: (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of…
A: Contribution is usually defined as Sales minus the variable costs of an organization The degree of…
Q: Firm M expects to earn $210,000 next year after taxes. Sales will be $4 million. This firm makes…
A: Given Information: Sales = $4,000,000 Profits after taxes = $210,000 Sales per unit = $200 Variable…
Q: Wingler Communications Corporation (WCC) producespremium stereo headphones that sell for $28.80 per…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: In its first year of operations, a firm had P50,000 of fixed operating costs. it sold 10,000 units…
A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…
Q: 2). annually. Company’s annual sales are OMR (4) million, its tax rate is 30%, and its rate on…
A: Degree of operating leverage computes the times by which contribution margin exceeds earning before…
Q: The fixed costs at Harley Motors are $1 million annually. The main product has revenue of $9.90 per…
A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…
Q: A company expects to sell 30,000 units of a product next year. Variable production cost is ₱25 and…
A: Number of units = 30,000 Variable Cost per unit = 25 Variable Production Costs = Variable Cost per…
Q: Petersen Company has a capital budget of $1.2 million. The company wants to maintain a target…
A: Payout ratio = Dividend paid / Total Earning Residual income = Net income - Equity
Q: Reliance fresh has planned operating expenses of ₹170,000, a profit goal of₹35,000, and it expects…
A: Working Note :- Calculation of Cost Of Goods Sold Particulars Budgeted…
Q: The Titan Company provides you with the following information for the current year: Revenues =…
A: It is given that cost of goods sold = $750,000 2/3rd of the above is variable , variable cost =…
Q: Compute the projected after-tax operating cash flow for Steber during the coming year.
A: Operating Cash Flow: These are cash flows of the firm generated from the normal operations. These…
Q: A plant produces 300 units of an equipment a month of P3,600 each. A unit sells for P4.00. The…
A: Production = 300 units Cost per unit = P3,600 Selling price per units = P4,800 ( P4.00 given in…
Q: Frontier Corp. has a contribution margin of $648,000 and profit of $162,000. If sales increase 18%,…
A: In order to determine the percentage increase in profit, the degree of operating leverage is…
Q: Catrina Soft Drinks, Inc., sells 500,000 bottles of soft drinks a year. Each bottle produced has a…
A: Sale=Unit sale price×Units sold=P 0.45×500000=P 225,000
Q: Larger Company had originally expected to earn operating income of Php130,000 in the coming year.…
A: Operating leverage shows the change in income of the company with respect to change in sales.
Q: C Corporation sells its product for $12 per unit. Next year, fixed expenses are expected to be…
A: Analysis of the target profit helps a company to determine the level of dollar sales required to…
Q: Discuss the materiality concept. Is the dollar amount that is material the same for a company that…
A: Materiality concept: The accounting concept which focusses that all the financial items and figures…
Q: Last year, the contribution margin ratio of Lamesa company was 30%. this year, fixed costs are…
A: The contribution margin is calculated as difference between sales and variable costs.
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: A firm sells 500,000 widgets at $40 each, the cost of the widgets is $25 each, expected general and…
A: An income statement is a financial report that indicates the revenue and expenses of a business. It…
Q: Peterson Manufacturing is evaluating two different operating structures which are described below.…
A: answar 1.(x) EBIT and EPS in both the structures Operating structure 1 10000 units 20000 units…
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: Atlas Company has a monthly target operating income of $2 expenses are 60% of sales and monthly…
A: Option (b) 1.57 is the correct answer. Solution: Contribution = Target Income + Fixed 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: Xeta Inc., sells a box for $15 each. The box have a variable cost of $4 per unit, and the products'…
A: the Break-Even Point can be defined as a point where total costs (expenses) and total sales…
Q: XYZ Company's single product has a selling price of $15 per unit. The fixed expenses were $120,000.…
A: Let units sold be X Sales = 15X Contribution = Fixed expenses + Profit = $120,000 + $60,000…
Q: Brolin Company sells a single product. The product has a selling price of $50 per unit and variable…
A: Solution : Contribution margin ratio = 100% - variable cost ratio = 100% - 80% = 20%
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Payne Products had $1.6 million in sales revenues in the most recent year and expects sales growth to be 25% this year. Payne would like to determine the effect of various current assets policies on its financial performance. Payne has $1 million of fixed assets and intends to keep its debt ratio at its historical level of 60%. Payne’s debt interest rate is currently 8%. You are to evaluate three different current asset policies: (1) a restricted policy in which current assets are 45% of projected sales, (2) a moderate policy with 50% of sales tied up in current assets, and (3) a relaxed policy requiring current assets of 60% of sales. Earnings before interest and taxes are expected to be 12% of sales. Payne’s tax rate is 40%. What is the expected return on equity under each current asset level? In this problem, we have assumed that the level of expected sales is independent of current asset policy. Is this a valid assumption? Why or why not? How would the overall risk of the firm vary under each policy?Larger Company had originally expected to earn operating income ofPhp130,000 in the coming year. Its degree of operating leverage is 2.4.Recently, larger revised its plan and now expects to increase sales by 20%next year. What is the percentage change in operating income for thecoming year? a. 8.33%b. 48.00%c. 20.00%d. 54.17%If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5, then net income should increase by: A. 167%. B. 100%. C. 334%. D. 250%.
- pharoah marble company has total assets of 13350000 sales of 18690000 and net income of 4672500. management expects sales to grow by 25% next year. all assets and costs (including taxes) vary directly with sales, and management expects to maintain a payout ratio of 65%. Calculate Pharoah's EFN.XYZ Company's single product has a selling price of $15 per unit The fxed expenses were $100,000 This year the company po a net operating income of $40000. If sales are predicted to increase by 10% next year, how much would the increase in profit be Select one Da6000 Ob5600 OENO change in income d 14000 e4000Bulldogs Inc. forecasted the following data for 2022.· Forecasted unit sales is 20,000.· The selling price of the units is P25.· Contribution Margin ratio is 40%.· Earnings before interest and taxes at P110,000.· The P200,000 total debt of the company requires annual of interest at 10%.What is the degree of combined leverage?
- Phoenix TV is forecasting the following income statement: Sales Operating costs excluding depr.& amort. EBITDA Depreciation & amortization EBIT Interest EBT Taxes (40%) Net income $8,000,000 4,400,000 $3,600,000 800,000 $2,800,000 600,000 $2,200,000 800,000 $1,320,000 The CEO would like to see higher sales and a forecasted net income of $2,500,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. The tax rate, which is 40%, will remain the same. What level of sales would generate $2,500,000 in net income?O e. operating income will decrease. XYZ Co. has a contribution margin of $450,000 and profit of $150,000. If sales increase 5%, by how much will profits increase? O a. 15% O b. 90% 30% O d. 60% O e. None of the given answer is correct. NEXT PAGE AGE PoCathey Corporation currently has sales of $1,000, which are expectedto grow by 10% from Year 0 to Year 1 and by 4% from Year 1 toYear 2. The company currently has an operating profitability (OP)ratio of 7% and a capital requirement (CR) ratio of 50% and expectsto maintain these ratios at their current levels. The current levelof total net operating capital (OpCap) is $510. Use these inputs toforecast free cash flow (FCF) for Years 1 and 2. (Hint: You must firstforecast sales, net operating profit after taxes (NOPAT), and total netoperating capital (OpCap) for each year.) ($37.00 and $58.08)
- Clinton Co. has an operating leverage of 4. Sales are expected to increase by 6% next year. Operating income is _____. a. expected to increase by 1.5% b. expected to increase by 4 times c. unaffected d. expected to increase by 24%XYZ company expects in the coming year: sales of 40000 units at $10 per unit, variable operating costs of $4 per unit, fixed operating costs of $30000, interest of $50000, and preferred stock dividends of $24000. The Company is in the 40% tax bracket. a. Compute the following and explain their meaning: 1- Degree of Operating Leverage (DOL). 2- Degree of Financial Leverage (DFL). 3- Degree of Total Leverage (DTL). b. If XYZ company’s Earnings Per Share (EPS) is currently $7.2, estimate its EPS in case of a 10% increase in earnings before interest and tax (EBIT).Be sure your inputs are set to the following: Plant Cost $4,000,000 year 0 Sales (units) 80,000 year 1 Selling Price $25 each Sales Growth per year Variable Costs 40% of revenu SG&A 50% of revenue SG&A Declines 2% per year Depreciation 5 years, straight-line Tax Rate 35% What is the Sales Growth percentage that results in total net income closest to 0? Report your answer to the nearest 0.1% with no extra words or punctuation. Examples of Correct Answers: 22.3% 22.3 Answer: Change your inputs to the following: Plant Cost $3,000,000 year 0 Salor fumital
