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Assume the following information: Sales Variable expenses Contribution margin Fixed expenses Net operating income The degree of operating leverage is: Multiple Choice O O O 2.50. 0.67. 1.50. 0.40. Amount $ 300,000 120,000 180,000 60,000 $ 120,000 Per Unit $ 40 16 $24

Assume the following information: Sales Variable expenses Contribution margin Fixed expenses Net operating income The degree of operating leverage is: Multiple Choice O O O 2.50. 0.67. 1.50. 0.40. Amount $ 300,000 120,000 180,000 60,000 $ 120,000 Per Unit $ 40 16 $24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume the following information: Sales Variable expenses Contribution margin Fixed expenses Net operating income. The degree of operating leverage is: Multiple Choice O O Activity Cost Pool Machining Machine setups Product design OOOO Show Transcribed Text Multiple Choice $205.000 2.50. $225,000 0.67. $198.000 1.50. $249.000 0.40. Assume a company manufactures only two products-14,000 units of Product A and 6,000 units of Product 8. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional Information is available for the company as a whole and for Products A and B Activity Measure Machine-hours Number of setups Number of products Product A Product B 9,000 se 1 Estimated Overhead Cost Activity Measure Machine-hours Number of setups Number of products. Using the ABC system, how much overhead cost would be assigned from the Machining cost pool to Product A? 6,000 150 1 $ 300,000 $ 150,000 $78,000 Amount $ 300,000 120,000 180,000 60,000 $ 120,000 3 200 Setups Expected Activity 12,000 MH 2 Products C Per Unit $40 16 $24
Transcribed Image Text:Assume the following information: Sales Variable expenses Contribution margin Fixed expenses Net operating income. The degree of operating leverage is: Multiple Choice O O Activity Cost Pool Machining Machine setups Product design OOOO Show Transcribed Text Multiple Choice $205.000 2.50. $225,000 0.67. $198.000 1.50. $249.000 0.40. Assume a company manufactures only two products-14,000 units of Product A and 6,000 units of Product 8. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional Information is available for the company as a whole and for Products A and B Activity Measure Machine-hours Number of setups Number of products Product A Product B 9,000 se 1 Estimated Overhead Cost Activity Measure Machine-hours Number of setups Number of products. Using the ABC system, how much overhead cost would be assigned from the Machining cost pool to Product A? 6,000 150 1 $ 300,000 $ 150,000 $78,000 Amount $ 300,000 120,000 180,000 60,000 $ 120,000 3 200 Setups Expected Activity 12,000 MH 2 Products C Per Unit $40 16 $24
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