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A company started as a small grain milling operation in 1 9 9 9 . The company now processes, on average, 1 2 7 million
A company started as a small grain milling operation in The company now processes, on average, million pounds of wheat each year. Milled wheat flour is sold in pound sacks to retailers. Assume sacks were sold for $ each last year. Variable costs were $ per pack and fixed costs totaled $ The contribution income statement for is shown below: In general, explain the differences between a contribution and a functional income statement. For the company in this example, determine last year's operating leverage. For the company in this example, calculate the percentage change in profits if sales decrease by Management of the company in this example is considering the purchase of several new pieces of packaging equipment. This will increase annual fixed costs to $ and reduce variable costs to $ per sack. Calculate the effect of this acquisition on operating leverage and explain any change
A company started as a small grain milling operation in The company now
processes, on average, million pounds of wheat each year. Milled wheat flour is
sold in pound sacks to retailers. Assume sacks were sold for $ each
last year. Variable costs were $ per pack and fixed costs totaled $ The
contribution income statement for is shown below:
In general, explain the differences between a contribution and a functional income
statement.
For the company in this example, determine last year's operating leverage.
For the company in this example, calculate the percentage change in profits if sales
decrease by
Management of the company in this example is considering the purchase of several
new pieces of packaging equipment. This will increase annual fixed costs to $
and reduce variable costs to $ per sack. Calculate the effect of this acquisition on
operating leverage and explain any change
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