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1) QUESTION 1 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2) QUESTION 2 Following is the income statement for Morning Mufflers for the month of June 2024: Requirements: 1. Calculate the
1) QUESTION 1
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2) QUESTION 2
Following is the income statement for Morning Mufflers for the month of June 2024:
Requirements:
1. | Calculate the degree of operating leverage. (Round to four decimal places.) |
2. | Use the degree of operating leverage calculated in Requirement 1 to estimate the change in operating income if total sales increase by 20% (assuming no change in sales price per unit). (Round interim calculations to four decimal places and final answer to the nearest dollar.) |
3. | Verify your answer in Requirement 2 by preparing a contribution margin income statement with the total sales increase of 20%. |
*I know you don't normally do 2 questions in one, but If you could do both since the first one is short that would be greatly greatly greatlyyyy appreciated :)
Reynold's Repair Shop has a monthly target profit of $15,000. Variable costs are 75% of sales, and monthly fixed costs are $10,000. Requirements 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. 2. Express Reynold's margin of safety as a percentage of target sales. 3. Why would Reynold's management want to know the shop's margin of safety? Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Select the labels and enter the amounts to compute Reynold's Repair Shop's monthly margin of safety in dollars. - Margin of safety in dollars = 1 Data table Morning Mufflers Contribution Margin Income Statement Month Ended June 30, 2024 Net Sales Revenue (240 units * $150 per unit) $ Variable Costs (240 units * $100 per unit) Contribution Margin 36,000 24,000 12,000 9,000 Fixed Costs $ 3,000 Operating Income
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