Exercise 6-8 (Algo) Compute the Margin of Safety [LO6-7] Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Required: 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. 1234 should be entered as 12.34 ).) Mauro Products distributes a single product, a woven basket whose selling price is $19 per unit and whose variable expense is $17 per unit. The company's monthly fixed expense is $3,400. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) Exercise 6-9 (Algo) Compute and Use the Degree of Operating Leverage [LO6-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. (Round vour intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e, 1234 should be entered as 12.34) ) Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. (Do not round your intermediate calculations. Round your Variable cost answer to 2 decimal places and Fixed cost element answer to nearest whole dollar amount.) 2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Systernatic factors like guests, switching off fans and lights. Number of days present in a month. sicome taxes paid on hotel income. Seasonal factors like winter or summer. Fixed salary paid to hotel receptionist
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