Please help me Information for two companies follows:SalesContribution marginFixed costsSkittles Company$ 4,075,6002,595,6001,977,600(1) Compute the degree of operating leverage (DOL) for each company.(2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?StarburstCompany$ 3,870,0001,350,000810,000Complete this question by entering your answers in the tabs below.Skittles's DOLStarburst's DOLRequired 1 Required 2Compute the degree of operating leverage (DOL) for each company.Degree of Operating Leverage1Denominator:1Numerator:< Required 1=RatioDegree of Operating LeverageRequired 2 >

The degree of operating leverage (DOL) helps to measure the degree of change in Operating Income…

Sales Contribution margin Fixed costs Skittles Company $ 4,075,600 2,595,600 1,977,600 $ 1) Compute the degree of operating leverage (DOL) for each company. 2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales? Skittles's DOL Starburst's DOL Company 3,870,000 1,350,000 810,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the degree of operating leverage (DOL) for each company. Degree of Operating Leverage Denominator: Numerator: Ratio Degree of Operating Leverage

Sales Contribution margin Fixed costs Skittles Company $ 4,075,600 2,595,600 1,977,600 $ 1) Compute the degree of operating leverage (DOL) for each company. 2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales? Skittles's DOL Starburst's DOL Company 3,870,000 1,350,000 810,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the degree of operating leverage (DOL) for each company. Degree of Operating Leverage Denominator: Numerator: Ratio Degree of Operating Leverage

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 13EA: Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are...

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Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company Bs fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? Explain why.
Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.
If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of operating leverage? A. 0.18 B. 1.18 C. 2.4 D. 4.7
The CVP income statements shown below are available for Blossom Company and Crane Company. Blossom Co. $600,000 320,000 Sales revenue Variable costs Contribution margin Fixed costs Operating income (a1) Blossom Co. Calculate the degree of operating leverage for each company. (Round answer to 2 decimal places, e.g. 15.25.) Crane Co. 280,000 180,000 $100,000 Save for Later Crane Co. $600.000 120,000 480,000 380,000 $100,000 Operating leverage Attempts: 0 of 1 used Submit Answer
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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$ $ (>
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Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $295,300 $834,000 Variable costs 118,500 500,400 Contribution margin $176,800 $333,600 Fixed costs 124,800 194,600 Income from operations $52,000 $139,000 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. $ % 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.
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