Alpha Geek

(8)

$10/per page/Negotiable

About Alpha Geek

Levels Tought:
University

Expertise:
Accounting,Algebra See all
Accounting,Algebra,Architecture and Design,Art & Design,Biology,Business & Finance,Calculus,Chemistry,Communications,Computer Science,Environmental science,Essay writing,Programming,Social Science,Statistics Hide all
Teaching Since: Apr 2017
Last Sign in: 438 Weeks Ago, 2 Days Ago
Questions Answered: 9562
Tutorials Posted: 9559

Education

  • bachelor in business administration
    Polytechnic State University Sanluis
    Jan-2006 - Nov-2010

  • CPA
    Polytechnic State University
    Jan-2012 - Nov-2016

Experience

  • Professor
    Harvard Square Academy (HS2)
    Mar-2012 - Present

Category > Applied Sciences Posted 29 Jul 2017 My Price 3.00

Assessing the magnitude of operating leverage

Exercise 11-14     Assessing the magnitude of operating leverage

The following income statement applies to Stuart Company for the current year

 

Sales revenue (400 units 3 $25)

$10,000

Variable cost (400 units 3 $10)

 (4,000)

Contribution margin

6,000

Fixed costs

 (3,500)

Net income

$2,500

 

 

Required

a.     Use the contribution margin approach to calculate the magnitude of operating leverage.

b.     Use the operating leverage measure computed in Requirement a to determine the amount of net income that Stuart Company will earn if it experiences a 10 percent increase in revenue. The sales price per unit is not affected.

c.     Verify your answer to Requirement b by constructing an income statement based on a 10 per- cent increase in sales revenue. The sales price is not affected. Calculate the percentage change in net income for the two income statements.

 

Answers

Alpha Geek
(8)
Status NEW Posted 29 Jul 2017 08:07 AM My Price 3.00

-----------

Attachments

file 1501319518-Answer.docx preview (107 words )
A-----------nsw-----------er ----------- a.----------- Bu-----------sin-----------ess----------- ri-----------sk -----------is -----------mea-----------sur-----------ed -----------by -----------the----------- de-----------gre-----------e o-----------f o-----------per-----------ati-----------ng -----------lev-----------era-----------ge.----------- It----------- is----------- de-----------fin-----------ed -----------as -----------the----------- pe-----------rce-----------nta-----------ge -----------cha-----------nge----------- in----------- op-----------era-----------tin-----------g i-----------nco-----------me -----------giv-----------en -----------a p-----------erc-----------ent-----------age----------- ch-----------ang-----------e i-----------n s-----------ale-----------s. -----------On -----------the----------- ot-----------her----------- ha-----------nd,----------- co-----------ntr-----------ibu-----------tio-----------n m-----------arg-----------in -----------(CM-----------) i-----------s c-----------alc-----------ula-----------ted----------- af-----------ter----------- ta-----------kin-----------g s-----------ale-----------s l-----------ess----------- al-----------l v-----------ari-----------abl-----------e c-----------ost-----------s. -----------Ope-----------rat-----------ing----------- in-----------com-----------e o-----------r E-----------BIT----------- = -----------CM -----------–----------- Fi-----------xed----------- Co-----------sts-----------. D-----------egr-----------ee -----------of -----------Ope-----------rat-----------ing----------- Le-----------ver-----------age----------- = -----------% c-----------han-----------ge -----------in -----------EBI-----------T /----------- % -----------cha-----------nge----------- in----------- sa-----------les----------- OR----------- CM----------- / -----------EBI-----------T T-----------her-----------efo-----------re,----------- Op-----------era-----------tin-----------g L-----------eve-----------rag-----------e
Not Rated(0)