Operating LeverageCartersville Co. reports the following data:Sales$485,800Variable costs291,500Contribution margin$194,300Fixed costs156,200Income from operations$38,100Determine Cartersville Company's operating leverage. Round your answer to one decimal place.

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

Answered: Operating Leverage Cartersville Co.…

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 financial data pertains to a certain single-product lodging business:Room Sales - $400,000Total Variable - $260,000Costs Contribution Margin - $140,000Total Fixed Costs - $ 76,000IBIT - $ 64,000Based on the financial data provided, the contribution margin percentage is __________ percent.
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.
The following income statement is provided for Vargas, Inc. What is this company's magnitude of operating leverage? Assume that net income is equal to operating income.
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.
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Consider the following summary modified income statement for Tech Inc.: Sales $593,000 Variable Operating Costs 252,000 Contribution Margin $341,000 Fixed Operating Costs 121,000 Operating Income $220,000 Interest Expense 26,000 Net Income $194,000 Calculate Tech's degree of operating leverage. A В C E 1 2 Degree of Operating Leverage = 4 5 7 8 9 10 3. 6.
Knowledge Check East Division of Blue Spruce Anchors provided the following information: Contribution margin Controllable margin Average operating assets Minimum rate of return Return on investment $890,000 $395,900 $2,140,000 Compute the return on investment and the residual income. (Round return on investment answer to two decimal places (e.g., 15.25%).) Residual income 9 % %

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Operating Leverage Cartersville Co. reports the following data: Sales $485,800 Variable costs 291,500 Contribution margin $194,300 Fixed costs 156,200 Income from operations $38,100 Determine Cartersville Company's operating leverage. Round your answer to one decimal place.