Operating leverageAsha Inc. and Samir Inc. have the following operating data:SalesVariable costsContribution marginFixed costsAsha Inc.Asha Inc.Samir Inc.$265,500(106,500)$159,000(106,000)$53,000$$Operating incomea. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place.Asha Inc.Samir Inc.Samir Inc.b. How much would operating income increase for each company if the sales of each increased by 10% ? If required, round answers to nearest whole number.DollarsPercentage$781,000(468,600)$312,400(170,400)$142,000c. The difference in thecontribution margin than are Samir Inc.'s.%%of operating income is due to the difference in the operating leverages. Asha Inc.'soperating leverage means that its fixed costs are apercentage of

a. Operating leverageAsha Inc.3.0Samir Inc.2.2 b. Operating Income increase (dollars &…

Answered: Operating leverage Asha Inc. and Samir…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Sales Variable costs Contribution margin Fixed costs Operating income a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. Beck Inc. Bryant Inc. $216,400 $576,000 (86,800) (345,600) $129,600 $230,400 (75,600) (86,400) $54,000 $144,000 b. How much would operating income increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Beck Inc. Bryant Inc. Dollars Percentage % % c. The difference in the of operating income is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a margin than are Bryant Inc.'s. percentage of contribution
The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company, Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 1000 156,000 $100,000 Blossom Co. Degree of Operating Leverage $495,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ 51,000 444,000 344,000 $100,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. Wildhorse Company $ tA $ Blossom Company
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $374,700 $1,056,000 Variable costs 150,300 633,600 Contribution margin $224,400 $422,400 Fixed costs 158,400 246,400 Income from operations $66,000 $176,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ %
The following CVP income statements are available for Cullumber Corp. and Ivanhoe, Inc. Cullumber Ivanhoe, Inc. Corp. Sales revenue $742,000 $742,000 Variable costs 371,000 225,250 Contribution margin 371,000 516,750 Fixed costs 238,500 384,250 Net income $132,500 $132,500 (a) Your answer is correct. Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 15.5.) Degree of Operating Leverage Cullumber 2.8 Ivanhoe 3.9 eTextbook and Media Assistance Used Attempts: 2 of 5 used (b) Assume that sales revenue decreases by 20%. Prepare a CVP income statement for each company. (Do not round intermediate calculations.) Cullumber Corp. Ivanhoe , Inc. 2$ $ 2$ $ (>
genow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Lo... r Operating Leverage Teague Co. reports the following data: Sales Variable costs Contribution margin Fixed costs $480,000 264,000 $216,000 175,200 $40,800 Income from operations Determine Teague Co.'s operating leverage. Round your answer to one decimal place.
The following CVP income statements are available for Cullumber Corp. and Ivanhoe, Inc. Cullumber Ivanhoe, Inc. Corp. Sales revenue $742,000 $742,000 Variable costs 371,000 225,250 Contribution margin 371,000 516,750 Fixed costs 238,500 384,250 Net income $132,500 $132,500 (a) Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 15.5.) Degree of Operating Leverage Cullumber Ivanhoe
Tom Company reports the following data: Sales Variable costs Fixed costs Determine Tom Company's operating leverage. Round your answer to one decimal place. $156,332 81,532 30,800
Snellville Co. reports the following data: Sales Variable costs Contribution margin Fixed costs $585,400 (351,200) $234,200 (187,400) $46,800 Operating income Determine Snellville Co.'s operating leverage. Round your answer to one decimal place.
Asha Inc. and Samir Inc. have the following operating data: Sales Variable costs Contribution margin Fixed costs Asha Inc. $2,500,000 (1,500,000) $1,000,000 (800,000) $200,000 Asha Inc. Samir Inc. Samir Inc. $4,000,000 (2,500,000) $1,500,000 (900,000) $600,000 Operating income a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. 150 75 Samir Inc. b. How much would operating income increase for each company if the sales of each increased by 30%? Dollars Percentage 30 % 30 % c. The difference in the increases of operating income is due to the difference in the operating leverages. Asha Inc.'s higher operating leverage means that its fixed costs are a smaller Inc.'s. percentage of contribution margin than are Samir
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $240,500 $576,000 Variable costs 96,500 345,600 Contribution margin $144,000 $230,400 Fixed costs 72,000 38,400 Income from operations $72,000 $192,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2 b. How much would income from operations increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $290,900 $805,500 Variable costs (116,700) (483,300) Contribution margin $174,200 $322,200 Fixed costs (107,200) (143,200) Operating income $67,000 $179,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would operating income increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ % c. The difference in the of operating income is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $326,000 $978,000 Variable costs 130,800 586,800 Contribution margin $195,200 $391,200 Fixed costs 134,200 228,200 Income from operations $61,000 $163,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2 b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS