Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E6-9 (Algo) Analyzing Break-Even Point, Preparing CVP Graph, Calculating Degree of Operating Leverage, Predicting Effect of Price Structure Changes [LO 6-1, 6-4, 6-5] Joyce

image text in transcribedimage text in transcribedimage text in transcribed

E6-9 (Algo) Analyzing Break-Even Point, Preparing CVP Graph, Calculating Degree of Operating Leverage, Predicting Effect of Price Structure Changes [LO 6-1, 6-4, 6-5] Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.59 per mile driven. Joyce has determined that if she drives 3,200 miles in a month, her total operating cost is $952. If she drives 4,800 miles in a month, her total operating cost is $1,208. Joyce has used the high-low method to determine that her monthly cost equation is total monthly cost $440 + $0.16 per mile driven. Required: 1. Determine how many miles Joyce needs to drive to break even. 2. Calculate Joyce's degree of operating leverage if she drives 5,000 miles, 3. Suppose Joyce took a week off and her sales for the month decreased by 20 percent. Using the degree of operating leverage, calculate the effect this will have on her profit for that month. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine how many miles Joyce needs to drive to break even. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Break-Even Units Miles Required 2 >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems

Authors: Marshall B. Romney, Paul J. Steinbart

13th edition

133428532, 978-0133428537

More Books

Students also viewed these Accounting questions

Question

What is beacon marketing? What are digital wallets?

Answered: 1 week ago