Log Co has an operating gearing ratio of 33.33%. Its sales are currently $100m and its operating profit is $20m. Operating gearing is calculated by dividing fixed costs by variable costs. What will its operating profit be if its sales increase by 15%? O $21m O $23m O $27m O $26m
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- Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage. Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?LMN Ltd sells 2.0m units of its product Y per year at a selling price of R200 per unit. Variable costs are R125 per unit. Fixed costs are R100m per year. What is the degree of operating leverage (DOL) at the current level of sales? DOL = 3.50 b. DOL = 2.00 c. DOL = 1.50 d. DOL = 2.25 e. DOL = 3.00
- Miko Firm is assessing its cost structure. It has P680,000 in fixed operating costs, P5.80 in variable costs per unit produced, and its goods sell for P9.00 per unit. What is the company's breakeven point, or the point at which profits equals costs in terms of unit sales volume? * Your answerStellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/ decreases by how much? Sales $50,000 Variable Costs $7,500 Fixed Costs $28,000Galactica Company has fixed costs of P100,000 and breakeven sales of P800,000. Based on this relationship, what is its projected profit at P1,200,000 sales?
- Beckham Company has the following information available: Selling price per unit: Variable cost per unit: Fixed costs per year: £400,000 Expected sales per year: 20,000 units What is the expected operating income (i.e. profit) for a year? Select one: O A. £500,000 O B. O C. £700,000 £680,000 £100 £55 O D. £480,000Marigold Corp. has fixed costs of $2200000 and variable costs are 20% of sales. What are the required sales if Marigold desires net income of $200000? $12000000 $2750000 $11000000 $3000000Papaya Corporation has the following product information: Sales price $9.00per unit Variable cost $5.00per unit per Fixed cost $22,000month lunits per Volume 10,500month The company believes that the volume will go up to 13,000 units if the company reduces its sales price to $7.50. How would this change affect operating income? O It will decrease by $20,000. O It will incrcase by $9500. O It will decrease by $9500. O It will increase by $20,000. Next > Previous
- Variable costs as a percentage of sales for Lemon Inc. are 60%, current sales are $675,000, and fixed costs are $182,000. How much will operating income change if sales increase by $41,100?Solve the following independent cases and label your supporting computations properly. A) The company's projected profit for the coming year is as follows: Total P 200,000' 120,000 80,000 64,000 16,000 Per Unit P 20 Sales Less: Variable Costs 12 P 8 Contribution Margin P Less: Fixed Costs Net Income 1. Compute the additional profit that the company would earn if sales were P25,000 more than expected. B) KTA sells a special type of health food at a price of P16 per pound. Last year, it purchases this food from its supplier at a cost of P12 per pound. The supplier informed KTA that its cost increases and that this product will now be priced at P14 a pound. Over the years, KTA established a steady market and intends to pass the cost increase along to its customers and also add a P1 per unit to the price for additional profit. Fixed cost for the year are not expected to change and will remain at P34,000. Income tax rate is 32%. The net income after tax last year was P24,000. 2. If KTA can…A company has return on sales of 20%, income of $50,000, selling price of $10, and a contribution margin of 40% . A. What are fixed costs? Why? How? B. What are variable costs per units? Why? How? C. What are sales in units? D. What are sales in dollars? Why? How?