Question
If the contribution margin ratio is 0.40, targeted operating income is $95,000, and targeted sales volume in dollars is $520,000, then the degree of operating
If the contribution margin ratio is 0.40, targeted operating income is $95,000, and targeted sales volume in dollars is $520,000, then the degree of operating leverage is ________.
3.28 times | ||
0.46 times | ||
1.50 times | ||
2.19 times |
Sales of Blistre Autos are 350,000, variable cost is 210,000, fixed cost is 90,000 tax rate is 40%. Calculate the operating leverage of the company.
1.50 times | ||
2.80 times | ||
4.67 times | ||
1.80 times |
Tony Manufacturing produces a single product that sells for $80. Variable costs per unit equal $45. The company expects total fixed costs to be $80,000 for the next month at the projected sales level of 2500 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.Suppose management believes that a $90,000 increase in the monthly advertising expense will result in a considerable increase in sales. Sales must increase by ________ to justify this additional expenditure?
2260 units | ||
1125 units | ||
2572 units | ||
2286 units |
Tony Manufacturing produces a single product that sells for $120. Variable costs per unit equal $50. The company expects total fixed costs to be $81,000 for the next month at the projected sales level of 3000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.Suppose that management believes that a 11% reduction in the selling price will result in a 11% increase in sales. If this proposed reduction in selling price is implemented ________.
operating income will decrease by $39,600 | ||
operating income will increase by $18,744 | ||
operating income will increase by $20,856 | ||
operating income will decrease by $20,856 |
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