Operating leverage measures the: 1. Change in profit when sales changes 2. change in contrribution when sales changes 3. change in BEP when fixed cost changes 4. change in BEP when sales changes
Q: The first time Paul worked on a puzzle it took him 6(1)/(4) hours. Last week, Paul completed a…
A: Time taken for first puzzle= 6 1/4 hr Time taken for second puzzle = 2 1/6 hr
Q: When a company purchases prepaid rent, it
A: Prepaid rent is the amount of rent which is paid by the entity in advance against which the property…
Q: 4. The MTN Company has assembled the following data pertaining to certain costs which cannot be…
A: The high-low method is used to differentiate the mixed cost. The mixed cost is a combination of…
Q: Bula Investments acquired $240,000 of Effenstein Corp., 8% bonds at their face amount on October 1,…
A: For accounting purposes, the record of all the transactions that take place in the daily course of…
Q: Roadmaster Tires produces a variety of auto and truck tires at its Indianapolis manufacturing plant.…
A: Traditional costing is more simpler than activity based costing. Activity based costing uses…
Q: Blossom Advertising Company's trial balance at December 31 shows Supplies $7,000 and Supplies…
A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…
Q: The adjusted trial balance of Martinez Advertising Services, at December 31, 2024, follows. This…
A: The current ratio is very important because it indicates liquidity in terms of the short-term debt…
Q: Primare Corporation has provided the following data concerning last month's manufacturing…
A: The cost of goods manufactured statement is prepared to record the direct and indirect manufacturing…
Q: OBJ. 2,1 EX 2-9 Transactions and T accounts The following selected transactions were completed…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: Management accounting considers these factors more important than others. a. verifiability,…
A: Management accounting is also referred to as managerial accounting. This is a type of accounting…
Q: considering the replacement of a piece of equipment with a newer model. The following…
A: Depreciation is term to book cost of fixed assets. There are various methods of depreciation such…
Q: is not an objective of managerial accounting? a. To prepare external reports for investors,…
A: Management accounting is important because it help us to analyse in order to make better decisions…
Q: Calculate the missing information on the following revolving credit accounts. Interest is calculated…
A: Finance charge A type of fees that has been imposed on the credit amount is called as finance…
Q: reported P 18,000 of net income for 2013, P 24,000 for 2014 and P 26,000 for 2015. The percentage…
A: The income of the company changes with time and sometime there is decrease and some time there is…
Q: The following data pertains to Hermes Company on December 31: Bank statement balance…
A: The bank reconciliation statement is prepared to reconcile the bank balance as per the cashbook and…
Q: Long Champ Company is preparing its March 31 bank reconciliation. The following data are available:…
A: Bank reconciliation statement is one of the important statement prepared in business, which shows…
Q: [The following information applies to the questions displayed below.] Wells Technical Institute…
A: Adjusted Trial Balance: The general ledger account names and balances are presented in the adjusted…
Q: Barkley Corp. obtained a trade name in January 2016, incurring legal costs of $72,000. The company…
A: Typically, impairment results in a dramatic drop in value. Unexpected causes like a financial crisis…
Q: Which product costs appear on the balance sheet? a. goods that are partially completed at end of…
A: Product cost refers to the cost incurred in the production of goods and includes direct materials,…
Q: Kheena Company filed a voluntary bankruptcy petition on June 1, 2022 and the statement of affairs…
A: In case of dissolution of a business entity, all the assets are sold in order to pay for the…
Q: [The following information applies to the questions displayed below.] Wells Technical Institute…
A: An adjusting entry is a type of journal entry made at the end of the year to recognize expenses and…
Q: A company manufactures and sells a single product X, t
A: In Marginal Costing variable costs are given prime importance and fixed costs…
Q: In its Dec. 31, 2020 statement of financial position, how much non-current liabilities should be…
A: Non-current liabilities, as the name suggests, are those obligations which an entity is not required…
Q: At the beginning of last year (2021), Reema Condos installed a mechanized elevator for its tenants.…
A: a) Gain or loss if old elevator is replaced Particulars Amount ($) Purchase price of the old…
Q: Pecan Co, produced and sold 40.000 units last year, per unit revenue and costs were as shown in the…
A: Operating Income - Operating Income are derived from the operating activities of the company. It is…
Q: • Jeff, age 68 and Claire, age 63 elect to file Married Filing Jointly. Neither taxpayer is…
A: American Opportunity Tax Credit (AOTC): It is the credit available for an eligible student who…
Q: On March 31, 2024, Susquehanna Insurance purchased an office building for $14,700,000. Based on…
A: Fixed Assets: The assets that have a useful life of more than a year are termed fixed assets and are…
Q: Eng Company's statement of owner's equity for the year showed a profit of $8,000 and closing Owner's…
A: The closing entries are prepared to close the temporary accounts of the business. The temporary…
Q: David Ltd manufactures and sells a single product. The standard selling price per unit is $120. The…
A: MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is One of the Important Cost…
Q: Expense Gas Insurance Oil Registration Depreciation Yearly cost or rate A. $6.10 per mile C. $0.23…
A: Cost per mile is to be calculated by taking total cost as numerator and total number of miles…
Q: llowing are the transactions and adjustments that occurred during the first year of operations at…
A: Workings:- CASH DESCRIPTION Amount Cash…
Q: In an income statement. If the income earned is 523,200 and the expenses incurred is 123,000 the…
A: One of a company's primary financial statements, the Income Statement, displays profit and loss for…
Q: Problem 5-49 (LO 5-2) (Static) Identify the amount, if any, that these individuals must include in…
A: The cash method of accounting states that revenues and expenses are accounted for based on receipts…
Q: The accountant of CLN Company gathered the following information: - The November 30 bank statement…
A: Bank reconciliation statement refers to a statement prepared in order to reconcile the difference…
Q: Record the purchase of 200000 of new aircraft equipment by paying 15000 cash and trading in old…
A: Aircraft equipment is an asset in the books of a company. In this case the company is buying a new…
Q: What is the point of included non-cash entries such as accruals and depreciation in a financial…
A: Lets understand the basics. Adjusting entry is required to make to record correct amount of revenue…
Q: Bergo Bay's accounting system generated the following account balances on December 31. The company's…
A: Factory overhead It is the costs incurred during the manufacturing process and it is not including…
Q: How to write a bank reconciliation statement?
A: Bank reconciliation statement: It is a table prepared at the end of a month to check whether the…
Q: Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current…
A: A company’s intangible asset is one that has been created or acquired but cannot be seen by anyone.…
Q: Zeus Investments Inc. is a regional freight company that began operations on January 1, 20Y8. The…
A: Accounting treatment for Investment in Trading Securities The category of the stocks, which is…
Q: The unadjusted trial balance as of December 31, 2024, the end of the annual accounting period for…
A: An accounting worksheet is prepared to determine the accuracy of the financial statements of the…
Q: Lancaster Company had earnings net of tax but before extraordinary items of $500,000. They had an…
A: How much net profit can be allocated to each outstanding share of common stock is shown by the…
Q: Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing Accounting…
A: The production cost report is related to the identification of the total; direct cost of producing…
Q: Pina Furniture Ltd. uses a perpetual inventory system and has a beginning inventory, as at June 1,…
A: Under weighted average model, cost of the goods that are available for sale divided by the number of…
Q: Question 4 of 6 View Policies Current Attempt in Progress The income statement of Sunland Company…
A: Deferred revenues are revenues that are earned but not yet received by the business. Accrued…
Q: EXERCISE 1: RETURN ON ASSETS AND COST OF FINANCING Non-current assets Current assets $1,260,000…
A: Ratio analysis is quantitive method of getting inside review of an organisation. Ratio analysis make…
Q: closing entries.
A: Income statement accounts are actually temporary. So, they should be closed at the end of every…
Q: January of Year 1, Ford Co. purchased a patent from a research institution for $600,000. The patent…
A: Patent is a intangible asset. To book expenses of intangible asset we have concept of amortization…
Q: Trevor Mills produces agricultural feed at its only plant. Materials are added at the beginning of…
A: Solution.... Equivalent units are the notional units which describe the amount of work that has…
Q: income statement. If the income is 426,000 and the expenses is 500,000. The result of operation is
A: The income statement is one of the financial statements of the business. The income statement…
Operating leverage measures the:
Step by step
Solved in 2 steps
- The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves a. margin of safety. b. unit contribution margin. c. degree of operating leverage. d. sensitivity analysis. e. variable cost reduction.Profitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.On a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the difference represents Select one: O A. a positive return on the investment O B. a net loss O C. net income O D. not enough information is presented
- Operating leverage measures the: O Change in profit when sales changes. O Change in Contibution when sales changes. O Change in BEP when fixed cost changes. O Change in BEP when sales changes.Below is the information on a project that you are evaluating for deciding on its worthiness as an investment. ABC company is considering a new investment whose data are shown below. WACC for the project under consideration Net investment in fixed assets (immediate) Required new working capital (immediate) Working capital from the end of the first year onwards as a Percentage of Sales Straight line deprec. Rate (every year end from the end of year 1} Sales revenues (starting at the end of year 1) Operating cost excluding depreciation, (starting at the end of year 1) 10% 75000 15000 25% 33.33% 75000 25000 Tax Rate Annual increase in Operating Costs each year from year 2 onwards Annual increase in Sales revenue from the end of the year 2 onwards Depreciation: Fixed assets to be fully depreciated in books using the straight line method over 4 years to zero Salvage value of the fixed assets at the end of the project life 35% 6% 97501. Which of the following shows the degree of operating leverage? The percentage change in the sales volume as the result of the percentage change in cost of the goods sold The percentage change in the net income as the result of the percentage change in the variable costs The percentage change in the sales volume as the result of the percentage change in the sales price The percentage change in the net inome as the result of the percentage change in the sales volume The percentage change in the operating income as the result of the percentage change in the sales volume
- Contribution margin is a.the same as sales revenue b.the excess of sales over variable costs c.another term for volume in the "cost-volume-profit" analysis d.profit3. Give an example of CVP and Compute BEP, Changes in Net Income, Margin of Safety, and Degree of Operating Leverage.A Cost-Volume-Profit graph contains an "Area of Loss" and an "Area ofProfitability". Which of the following best explains the difference between thetwo points on the graph? A. The area of loss represents the difference between Sales and Variable Cost.B. The area of loss begins with the concept that fixed costs have to be recovered priorto sales contributing to profit.C. The area of profit represents the difference between Sales and Variable Cost.D. The area of profit begins with the concept that no company would have any level ofsales below the break-even point.
- Which tool can be used to easily calculate the change in profit resulting from a change in sales price, sales volume, variable costs, or fixed costs?Which of the following would be considered as a limiting factor to maximize the profit? O a. Book value O b. Fixed cost Oc. Contribution d. SalesWhich of the following statements is true? OA. When a large proportion of income is spent on a product or service, the more elastic the supply will be. Percentage change in price OB Elasticity of supply Percentage change in quantity supplied OC. Products or services in which inputs are readily available have a more elastic supply. OD. None of the above is true. hand written otherwise skip
