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Operating Leverage 1) Snellville Co. reports the following data: Sales $775,500 Variable costs 504,100 Contribution margin $271,400 Fixed costs 205,200 Income from operations $66,200 Determine
Operating Leverage
1) Snellville Co. reports the following data:
Sales | $775,500 | |
Variable costs | 504,100 | |
Contribution margin | $271,400 | |
Fixed costs | 205,200 | |
Income from operations | $66,200 |
Determine Snellville Company's operating leverage. Round your answer to one decimal place.
2) High-Low Method
Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:
Units Produced | Total Costs | |||
4,050 | $325,080 | |||
1,350 | 208,980 | |||
2,920 | 309,750 |
Variable cost: (Round to the nearest dollar. | $ |
Total fixed cost: | $ |
a. Determine the variable cost per unit and the total fixed cost.
b. Based on part (a), estimate the total cost for 1,940 units of production.
Total cost for 1,940 units: | $ |
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