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(The following information applies to the questions displayed below.) Felix & Company reports the following information. Period 1 2 3 DOWN Units Produced Total Costs
(The following information applies to the questions displayed below.) Felix & Company reports the following information. Period 1 2 3 DOWN Units Produced Total Costs $ 4,560 460 3,860 860 4,260 1,260 4,860 1,660 3,960 2,060 4,160 2,460 8,660 2,860 16,060 3,260 4,860 3,660 10,782 9 10 (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 1,460 units are produced. High-Low method - Calculation of variable cost per unit High-Low method - Calculation of fixed costs Total cost at the highest volume Variable costs at highest volume Highest volume Variable cost per unit Total variable costs at highest volume Total fixed costs Total cost at the lowest volume Variable costs at lowest volume (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 1,460 units are produced. High-Low method - Calculation of variable cost per unit 0 High-Low method - Calculation of fixed costs Total cost at the highest volume Variable costs at highest volume Highest volume Variable cost per unit Total variable costs at highest volume Total fixed costs Total cost at the lowest volume Variable costs at lowest volume Lowest volume Variable cost per unit Total variable costs at lowest volume Total fixed costs (2) Estimated cost f 1,460 units are produced: Estimated total cost Information for two companies follows: Skittles Starburst Company Company Sales $ 7,054,000 $ 4,275,000 Contribution margin 5,304,000 1,395,000 Fixed costs 4,284,000 945,000 (1) Compute the degree of operating leverage (DOL) for each company. (2) Which company is expected to produce a greater percent increase in income from a 10% Increase in sales? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the degree of operating leverage (DOL) for each company Degree of Operating Leverage 1 Denominator: Numerator: Ratio Degree of Operating Leverage Skittles's DOL Starburst's DOL Required Required 2 > Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,000 units at $280 each) Variable costs (9,000 units at $210 each) Contribution margin Fixed costs Income $ 2,520,000 1,890,000 $ 630,000 420,000 $ 210,000 1. Compute the company's degree of operating leverage. 2. If sales decrease by 6% in the next year , what will be the company's income? 3. Prepare a contribution margin income statement for the next year assuming sales decrease by 6%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the company's degree of operating leverage. (Round your answer to 1 decimal place.) Degree of operating leverage Required 1 Required 2 > 2 Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,000 units at $280 each) Variable costs (9,000 units at $210 each) Contribution margin Fixed costs Income $ 2,520,000 1,890,000 $ 630,000 420,000 $ 210,000 ook 1. Compute the company's degree of operating leverage. 2. If sales decrease by 6% in the next year, what will be the company's income? 3. Prepare a contribution margin income statement for the next year assuming sales decrease by 6% rit rences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a contribution margin income statement for the next year assuming sales decrease by 6%. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs Income
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