Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sandy sells authentic Amish quilts on her website. Suppose Sandy expects to sell 1,000 quilts during the coming year. Her average sales price per

Sandy sells authentic Amish quilts on her website. Suppose Sandy expects to sell 1,000 quilts during the coming year. Her ave 

Sandy sells authentic Amish quilts on her website. Suppose Sandy expects to sell 1,000 quilts during the coming year. Her average sales price per quilt is $300, and her average cost per quilt is $150. Her fixed expenses total $75,000. Compute Sandy's operating leverage factor at an expected sales level of 1,000 quilts. If sales volume increases 8%, by what percentage will her operating income change? Prove your answer by calculating operating income at a sales volume of 1,000 and at a sales volume of 1,080. Compute her operating leverage factor. (Round your answer to two decimal places.) First, identify the formula, then compute the operating leverage factor. Contribution margin Operating income Operating leverage factor %D

Step by Step Solution

3.38 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

Sales volume increase by Ans 8 1000 quilts 1080 quilts Sandy Income Statement ... 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

Managerial Accounting

Authors: Karen W. Braun, Wendy M. Tietz

5th edition

134128524, 978-0134128528

More Books

Students also viewed these Accounting questions

Question

Fifteen minutes is what percentage of two hours?

Answered: 1 week ago