Question
Zero Company is planning the next year of operations and has just compiled the following Contribution Margin Income Statement: CM Income Statement Units Sold Per
Zero Company is planning the next year of operations and has just compiled the following Contribution Margin Income Statement:
CM Income Statement
Units Sold Per Unit Total
Sales 2,000.00 $600.00 $1,200,000.00
Variable Cost 2,000.00 $100.00 $200,000.00
Contribution Margin $1,000,000.00
Less Fixed Costs $900,000.00
Total Income Before Tax $100,000.00
1. Based on this information, Zero Company's leverage factor is __________
2. Based on the information in Question 1, if the company has a 9% increase in sales, its income before tax will increase by $_____________.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started