The CVP income statements shown below are available for Blossom Company and Crane Company.Blossom Co.$600,000320,000Sales revenueVariable costsContribution marginFixed costsOperating income(a1)Blossom Co.Calculate the degree of operating leverage for each company. (Round answer to 2 decimal places, e.g. 15.25.)Crane Co.280,000180,000$100,000Save for LaterCrane Co.$600.000120,000480,000380,000$100,000Operating leverageAttempts: 0 of 1 usedSubmit Answer

The contribution margin is calculated as the difference between sales and contribution margin. The…

The CVP income statements shown below are available for Blossom Company and Crane Company. Sales revenue Variable costs Contribution margin Fixed costs Operating income (a1) Blossom Co. Blossom Co. $600,000 320,000 Crane Co. 280,000 180,000 $100,000 Calculate the degree of operating leverage for each company. (Round answer to 2 decimal places, e.g. 15.25.) Crane Co. $600,000 120,000 480,000 380,000 $100,000 Operating leverage

The CVP income statements shown below are available for Blossom Company and Crane Company. Sales revenue Variable costs Contribution margin Fixed costs Operating income (a1) Blossom Co. Blossom Co. $600,000 320,000 Crane Co. 280,000 180,000 $100,000 Calculate the degree of operating leverage for each company. (Round answer to 2 decimal places, e.g. 15.25.) Crane Co. $600,000 120,000 480,000 380,000 $100,000 Operating leverage

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 16E

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The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company, Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 1000 156,000 $100,000 Blossom Co. Degree of Operating Leverage $495,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ 51,000 444,000 344,000 $100,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. Wildhorse Company $ tA $ Blossom Company
The CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $494,000 $494,000 Variable costs 233,000 45,000 Contribution margin 261,000 449,000 Fixed costs 161,000 349,000 Net income $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, eg. 1.15.) Degree of Operating Leverage Armstrong Contador (b) Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company. Armstrong Company Contador Company > > > > >
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 Ivanhoe
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $295,300 $834,000 Variable costs 118,500 500,400 Contribution margin $176,800 $333,600 Fixed costs 124,800 194,600 Income from operations $52,000 $139,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
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Tucker Co. reports the following data: Line Item Description Amount Sales $911,900 Variable costs (611,000) Contribution margin $300,900 Fixed costs (219,600) Operating income $81,300 Determine Tucker Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1 of 1
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 $132,500 (a) Your answer is correct. Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 15.5.) Degree of Operating Leverage Cullumber 2.8 Ivanhoe 3.9 eTextbook and Media Assistance Used Attempts: 2 of 5 used (b) Assume that sales revenue decreases by 20%. Prepare a CVP income statement for each company. (Do not round intermediate calculations.) Cullumber Corp. Ivanhoe , Inc. 2$ $ 2$ $ (>
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Snellville Co. reports the following data: Line Item Description Amount Sales $673,800 Variable costs (377,300) Contribution margin $296,500 Fixed costs (214,100) Operating income $82,400 Determine Snellville Co.’s operating leverage. Round your answer to one decimal place. fill in the blank 1 of 1