FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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If sales are $325,000, variable costs are 75% of sales, and operating income is $49,200, the operating leverage is
A. 5.0
B. 0.0
C. 1.7
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- Management anticipates fixed costs of $73,000 and variable costs equal to 47% of sales. What will pretax income equal if sales are $330,000? Multiple Choice $196,050. $257,000. $155,100. $101,900. $82,100.arrow_forwardVariable costs as a percentage of sales for Lemon Inc. are 64%, current sales are $691,000, and fixed costs are $180,000. How much will operating income change if sales increase by $41,800?arrow_forwardSales revenue is $ 500000 , Variable costs are 30 % of sales revenue and fixed costs are $ 200000 , determine the net profit ( loss )arrow_forward
- Boom Company has sales volume of 70,000 units with a unit selling price of $120 per unit. The variable expenses are $80 per unit, and the total fixed expenses are $2,100,000. 15. What is the degree of operating leverage? * 2.00 3.00 4.00 5.00 None of the above 16. If the sales volume increases by 15%, and all other items are the same, what will be the effect on the net operating income? * The net operating income will increase by $420,000 The net operating income will increase by $700,000 The net operating income will increase by $1,120,000 The net operating income will increase by $2,800,000 None of the above O O Oarrow_forwardE2-12 Identifying accounts, increases in accounts, and normal balances a. Interest Revenue f. Unearned Revenue g. Prepaid Rent h. Utilities Expense b. Accounts Payable c. Calhoun, Capital d. Office Supplies i. Calhoun, Withdrawals c. Advertising Expense j. Service Revenue Requirements 1. Identify each account as asset (A), liability (L), or equity (E). 2. Identify whether the account is increased with a debit (DR) or credit (CR). 3. Identify whether the normal balance is a debit (DR) or credit (CR).arrow_forward= $ A project has the following estimated data: price 104.00 per unit; variable costs = $60.50 per unit; fixed costs investment = $39,600.00; life = 6 years. What is the $37,500.00; required return = 8%; initial degree of operating leverage at the financial break - even level of output? a) 4.38 b) 7.38 c) 6.38 d) 3.38 e ) 5.38arrow_forward
- B. Consider the following: Total variable costs $200,000 Total fixed costs $150,000 Annual volume of units 500 Average invested capital $400,000 Target Return on investment 20.0% To the nearest tenth, what is the markup percentage required to earn the target return on investments using the cost-plus formula based on total costs?arrow_forwardIf sales are $796,000, variable costs are 76% of sales, and income from operations is $230,000, what is the contribution margin ratio? Oa. 76% Оb. 72% Ос. 28% Od. 24%arrow_forwardIf sales are $295,000, variable costs are 75% of sales, and operating income is $51,500, the operating leverage is a.4.3 b.1.1 c.1.4 d.0.0arrow_forward
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