Suhar company is a levered firm generate a contribution margin of its sales was OMR (75) thousand. The company spend OMR (30) thousands yearly of the operating fixed costs and paid OMR (10) thousands yearly of an interest. Calculate the degree of total leverage.
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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?Sales increased from Year 1 (with sales of 800,000) to Year 2 (with sales of 900,000); The DOL (Degree of Operating Leverage) in Year 1 is 5.0 and EBIT in Year 2 is 81,250. What is the fixed cost?Tom Company reports the following data: Sales Variable costs Fixed costs Determine Tom Company's operating leverage. Round your answer to one decimal place. $156,332 81,532 30,800
- If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of operating leverage? A. 0.18 B. 1.18 C. 2.4 D. 4.7Jakara 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%.3. income statement for the diff. companies in the same industry are as follows: trimax, inc. quintex, inc. sales p 500,000 p 500,000 less: variable costs 250,000 100,000 contribution margin p 250,000 p 400,000 less: fixed costs 200,000 350,000 operating income p 50,000 p 50,000 required: 1. compute the degree of operating leverage for each company. 2. compute the break-even point for each company. explain why the break-even point for quintex, inc. is higher. 3. suppose that both companies experience a 50 percent increase in revenues. compute the percentage change in profits for each company.
- 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.The following CVP income statements are available for Cullumber Corp. and Ivanhoe, Inc. Cullumber Ivanhoe, Inc. Corp. Sales revenue $742,000 $742,000 Variable costs 371,000 225,250 Contribution margin 371,000 516,750 Fixed costs 238,500 384,250 Net income $132,500 $132,500 (a) Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 15.5.) Degree of Operating Leverage Cullumber IvanhoeFrontier Corp. has a contribution margin of $1,682,000 and profit of $336,400. What is its degree of operating leverage? Multiple Choice 0.20 5.80 14.50 5.00
- 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 $26m1. The following CVP income statements are available for ABC Company and XYZ Company. Sales Variable costs Contribution margin Fixed costs Operating income ABC Company CVP I/S for 2020 $500,000 300,000 200,000 180,000 $ 20,000 XYZ Company CVP I/S for 2020 $500,000 180,000 320,000 300,000 $ 20,000 med m (a) Compute the break-even point in dollars and the margin of safety ratio for each w ww w w w w h m w m ww m company. (b) Compute the degree of operating leverage for each company. (c) Assuming that sales revenue decreases by 20%, each a CVP income statement for w w w w ww w www w w m wm company. (d) Assuming that sales revenue increases by 20%, calculate the operating incomes of the two companies without w w w w ww med m www S WInoul preparing income statement. (Use DOL) nea ww wThe following information pertains to Kem Corp. Operating Leverage 4 Fixed Costs P 30,000 Current Year Total Peso Sale P 125,000 Required: Construct the company’s contribution approach income statement and determine the net income of the company if total sales will increase by 20%.