Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. Calculate breakeven sales dollars for XYZ Company using the Y-formula. 2. The degree of leverage (DOL) for XYZ Company in 2020 is equal to
1. Calculate breakeven sales dollars for XYZ Company using the Y-formula.
2. The degree of leverage (DOL) for XYZ Company in 2020 is equal to what amount?
3. Using the degree of leverage (DOL) for 2020 that you just calculated in question #38, if XYZ Company expects sales to increase 10% in 2021, by how much will the net income increase in 2021?
USE THE FOLLOWING INFORMATION FOR THE NEXT 3 QUESTIONS Below is an income statement for XYZ Company for 2020: Sales $400,000 Variable costs (150,000) Contribution margin $250,000 Fixed costs (200,000 Net Income $ 50.000 37. Calculate breakeven sales dollars for XYZ Company using the Y-formula. A. $220,000 B. $320,000 C. $350,000 D. $270,000 38. The degree of leverage (DOL) for XYZ Company in 2020 is equal to what amount? A. 1.0 B. 2.0 C. 3.0 D. 4.0 39. Using the degree of leverage (DOL) for 2020 that you just calculated in question #38, if XYZ Company expects sales to increase 10% in 2021, by how much will the net income increase in 2021? A. $5,000 B. $10,000 C. $15,000 D. $20,000 E. $25,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started