Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 19-14 (Part Level Submission) The CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $602,000

Exercise 19-14 (Part Level Submission)

The CVP income statements shown below are available for Armstrong Company and Contador Company.

Armstrong Co.

Contador Co.

Sales $602,000 $602,000
Variable costs 278,900 76,200
Contribution margin 323,100 525,800
Fixed costs 167,600 370,300
Net income $155,500 $155,500

(a)

Your answer is correct.
Compute the degree of operating leverage for each company. (Round answers to 3 decimal places, e.g. 1.150.)

Degree of Operating Leverage

Armstrong

Contador

SHOW SOLUTION

SHOW ANSWER

LINK TO TEXT

Attempts: 1 of 3 used

(b)

Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company.

Armstrong Company

Contador Company

Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsNet Income/(Loss)Sales RevenueSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable Costs

$

$

Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsNet Income/(Loss)Sales RevenueSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable Costs

Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsNet Income/(Loss)Sales RevenueSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable Costs

Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsNet Income/(Loss)Sales RevenueSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable Costs

Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsNet Income/(Loss)Sales RevenueSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable Costs

$

$

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

Healthcare And Medical Office Accounting

Authors: Wayne A. Label, Weldon E. Havins

2nd Edition

0986099805, 978-0986099809

More Books

Students also viewed these Accounting questions

Question

Is willing to challenge constructively and be challenged.

Answered: 1 week ago