Question
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000 per year. |
Required: | ||||||
Answer the following independent questions: | ||||||
1. What is the product's CM ratio?
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4. Assume that the operating results for last year were: Sales Variable expenses Contribution margin 1,920,000 960,000 960,000 Fixed expenses 200,000 Net operating income $760,000 a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 2 decimal places.) Degree of operating leverage
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