Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Variable cost per unit (a) Sales revenue (8,000 units $29.00) Variable cost (8,000 units a) Contribution margin Fixed cost Net Income Company Name Larson Benson
Variable cost per unit (a) Sales revenue (8,000 units $29.00) Variable cost (8,000 units a) Contribution margin Fixed cost Net Income Company Name Larson Benson $ 20.00 $ 10.00 $ 232.000 $ 232,000 (160.000) (80.000 $ 72,000 $152,000 (24,300 104,300 $ 47,700 $ 47,700 Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 11 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage (Note Since the number of units increases, both revenue and variable cost will increase.) c. If the economy contracts in coming years, Larson and Benson will both suffer a 11 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) ces Complete this question by entering your answers in the tabs below. Required A Required B Required Use the contribution margin approach to compute the operating leverage for each firem (Round your answers to decimal places) Larson Benson Company Name Operating leverage Required 8 > Company Name Larson Benson $ 20.00 $ 10.00 Variable cost per unit Sales revenue Variable cost Contribution margin Fixed cost Net income Percentage change % %
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/669e3209cd7ad_529669e320967e89.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/669e320a75b94_530669e320a1ad91.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/669e320b1338e_530669e320aa62d3.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started