Information for two companies follows. (1) Compute the degree of operating leverage (DOL) for each company. (2)
Question:
Information for two companies follows.
(1) Compute the degree of operating leverage (DOL) for each company.
(2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?
Transcribed Image Text:
Skittles Co. Starburst Co. Sales .... $6,000,000 $4,500,000 Contribution margin .. 3,600,000 1,125,000 Fixed costs.... 2,600,000 375,000 ....
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 81% (11 reviews)
1 2 Skittles Co For Skittles a 20 increase in sales ...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
The degree of operating leverage for Dousmann Corp. and PCB Co. are 1.4 and 5.6, respectively. Both have net incomes of $50,000. Determine their respective contribution margin s.
-
The degree of operating leverage for Montana Corp. and APK Co. are 1.6 and 5.4, respectively. Both have net incomes of $50,000. Determine their respective contribution margin s. Discuss.
-
The degree of operating leverage for Astoria Corp. and STL Co. are 1.4 and 5.6, respectively. Both have net incomes of $50,000. Determine their respective contribution margin s.
-
The mass of the crane?s boom is 9000 kg. Its weight acts at?G. The sum of the moments about?P?due to the boom?s weight, the force exerted at?B?by the cable?AB,?and the force exerted at?C?by the...
-
Two steady flows of air enters a control volume, shown in Fig. P6.80. One is 0.025 kg/s flow at 350 kPa, 150C, state 1, and the other enters at 450 kPa, 15C, both flows with low velocity. A single...
-
A statistics practitioner took random samples from Canada, Australia, New Zealand, and the United Kingdom, and classified each person as either obese (2) or not (1). Can we conclude from these data...
-
From the perspective of either a hotel manager, events manager, or a tour operator discuss the role strategic managerial accounting can have in aiding management decision making.
-
Your clients degree of risk aversion is A = 3.5. a. What proportion, y, of the total investment should be invested in your fund? b. What is the expected value and standard deviation of the rate of...
-
Convert the Cartesian coordinate (6,-2) to polar coordinates, 0 < < 2 (in radian, round to at least one decimal place) r = Enter exact value. 0 = Question Help: Video 1 Video 2 Submit Question
-
Refer to Exhibit 14.8 and the accompanying discussion in the text. Demonstrate that the materials usage variance for PVC during October 2019 was $2,400F. SCHMIDT MACHINERY COMPANY Income Statement...
-
Refer to the information in Exercise 21-11. 1. Compute the companys degree of operating leverage. 2. If sales decrease by 5% in the next year, what will be the companys income? 3. Prepare a...
-
Vintage Company reports the following information. Compute its product cost per unit under absorption costing. Direct materials...... Direct labor..... Units produced.... $10 per unit $10 per unit...
-
Assume a planet with a one-layer atmosphere and values of solar constant S = 1,000 W/m 2 and albedo = 0:25. Let us assume there is some dust in the atmosphere, so that 50 percent of the Suns energy...
-
Exercise 6.2.7 According to the definition of linearity, are the following functions linear? a) f((\)) : - (*) c) f ( Y ) Z = 2Y 2X b) f(x) = x (2X = XY d) f( Y ) = 4Y 3Z 3Z Z
-
1 . You borrow $ 2 0 , 0 0 0 to finance the purchase of a new car. The loan is for 6 % interest annual, and the loan is paid monthly over a 1 0 year period. What is the monthly loan payment that you...
-
What is the difference between compensation, benefits and perks. How do these three (3) terms benefit employees in an organization?
-
If you save $ 6 4 0 per month for retirement in an account that earns 5 % interest per year, compounded monthly, how much will you have after 3 0 years? ( Enter an answer correct to the nearest cent....
-
NPV Calculate the net present value ( NPV ) for the following 1 2 - year projects. on the acceptability of each. Assume that the firm has a cost of capital of 7 % . a . Initial investment is $ 1 , 0...
-
In January, Marco incurs $2,800 in expenses traveling to San Diego to investigate the feasibility of acquiring a new business. He acquires the business and on March 1 forms a new corporation, Marco...
-
Write a paper by answer the following question: Should Recycling Be Mandatory?
-
What determines the amount deducted from an employees wages for federal income taxes?
-
Which payroll taxes are the employees responsibility and which are the employers responsibility?
-
Which payroll taxes are the employees responsibility and which are the employers responsibility?
-
Villian, Inc.'s comparative income statement follows. The 2023 data are given as needed.Begin by selecting the formula to calculate the profit margin ratio.Profit margin ratioXData tableTeal'S Clued...
-
When completing a bank reconciliation, Question 1 options: a) enter the check register balance on the current date. b) add bank fees to the check register amount. c) subtract outstanding deposits...
-
2. PT. Asindo pada tahun 2021 memiliki informasi sebagai berikut. Saldo kas awal Rp 10.000.000 Laba yang ditahan, awal Rp 15.000.000 Persediaan awal 5.000 Unit @Rp 3.500 Rp 17.500.000 Pembelian 7.000...
Study smarter with the SolutionInn App