operating leverage factor t
Q: Company X has two products: Product A and product B. Product A has a higher selling price but a…
A: Solution Concept If a product line has high selling price but a lower contribution margin it implies…
Q: Which of the following statements about operating leverage is false?
A: The answer for the multiple choice question and relevant explanation are presented hereunder :
Q: XYZ Company wishes to gain more market share . In order to do that , the company is planning to…
A: Variable cost is a cost that remains the same on a per unit basis and varies according to units…
Q: At the break-even point, sales and costs are exactly equal. However, the goal of most companies is…
A: If a company makes $ 5 off of each unit it sells and has a target operating income of $ 5,000, then…
Q: Which of the following statements about operating leverage is false? O a. If the degree of operating…
A: Answer
Q: A growing firm is contemplating switching from a FIFO to a LIFO cost flow assumption forinventories…
A: In case of rising prices, when the LIFO is applied the cost of goods sold will increase (as the…
Q: Let’s say that two firms, A and B have positive profit margins. B’s fixes costs as a percentage of…
A: Fixed costs are expenses that do not change based on production levels; variable costs are expenses…
Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…
A: The contribution margin decides which product gives more profits to the company. The contribution is…
Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…
A: Cost volume profit analysis: It can be defined as the technique of accounting that is used by the…
Q: The firm with the largest ratio of fixed costs to total costs automatically gets the greatest…
A: Lets understand the basics. Fixed cost is a cost which is fixed over a period of time. It includes…
Q: Which of the following statements is true with respect to the degree of operating leverage (DOL)?…
A: Degree of Operating Leverage: It shows how much the operating income changes with respect to change…
Q: All other things the same, which of the following would be true of the contribution margin and…
A: The contribution margin is the part of sales revenue that remained after deducting the variable cost…
Q: What analysis ensures that the income for the firm will cover its variable costs? a. ratio…
A: Companies need to analyse how many products to sell or how much sales to make in a financial year to…
Q: XYZ Company wishes to gain more market share. In order to do that, the company is planning to double…
A: given that, Selling price will receive to half Variable price per unit will constant Fixed cost…
Q: Is my explanation correct? When the shit in sales toward the lower contribution margin. In the…
A: Dear student your explanation is correct. In the sales mix, if the shift in sales to a product that…
Q: Mariana Manufacturing and Bellow Brothers compete in the same industry and in all respects their…
A:
Q: Break-even analysis is concerned with determining a point at which the company can minimize total…
A: Break-even point is the point reached by the company where the revenues and costs of the firm are in…
Q: If NUBD Company decided to increase its unit selling price to offset exactly the increase in the…
A: Note: On increasing the selling price per unit to offset exactly the increase in the variable cost…
Q: XYZ Company wishes to gain more market share. In order to do that, the company is planning to double…
A: XYZ company wishes to gain market share. Current Production doubled means quantity is doubled. Fixed…
Q: In all respects, Company A and Company B are identical except that Company A’s costs are mostly…
A:
Q: Two companies have identical fixed expenses, unit variable expenses, and profits. Yet one company…
A:
Q: If a company increases its fixed cost for product B, then the contribution margin per unit will…
A: Fixed cost is that cost which remains constant at particular level of…
Q: In the CVP analysis, Which of the following statements about the breakeven point is true? a.…
A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…
Q: XYZ Company wishes to gain more market share. In order to do that, the company is planning to double…
A: Sales:-It is the grand total sales obtained by adding and subtracting all related discounts and…
Q: Which of the following is the indicator of the rate at which company is earning profit? Select one:…
A: Ratio Analysis Each items in the financial statements of an enterprise is compared by using ratio…
Q: If company A has a higher degree of operating leverage than company B, then: Multiple Choice…
A: SOLUTION- Higher fixed costs lead to higher degrees of operating leverage; a higher degree of…
Q: XYZ Company wishes to gain more market share. In order to do that, the company is planning to double…
A: Answer
Q: If company A has a higher degree of operating leverage than company B, then: company A is more…
A: OPERATING LEVERAGE IS THE DEGREE TO WHICH A FIRM OR PROJECT CAN INCREASE INCOME BY INCREASING…
Q: Which of the following is true? O Variable costs minus the fixed costs equals net income. O Total…
A: The income is calculated as excess of revenues over expenses.
Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…
A: The graphical representation of the cost-volume benefit analysis is a cost volume profit graph, also…
Q: Firms with a high degree of operating leverage:
A: Degree of operating leverage is a measure that determines the quantum of change in a company's…
Q: Often the most direct route to a business decision is an incremental analysis. What is meant by an…
A: “Hey, since there are multiple questions posted, we will answer first two questions for you. If you…
Q: Which of the following statements about operating leverage is false? O a. If the degree of operating…
A: Operating Leverage = %change in EBIT / % change in sales
Q: Once a company exceeds its breakeven level, operating income can be calculated by multiplying: a.…
A: Break-Even Point: It is the point of sales at which entity neither earns a profit nor suffers a…
Q: If a company decreases its selling price for its products. The Increase? Total cost Cost plus…
A: Breakeven quantity increases with the following changes: Increase in amount of fixed costs,…
Q: Company A’s operations involve a fixed cost £1m and variable cost equal to 70% to revenues. Company…
A: Degree of operating leverage means the division of contribution with operating income. Lower the…
Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: a.…
A: Break-even point: In the accounting term break-even point is a condition where the income or profit…
Q: Which of the following statements about operating leverage is false? O a. All of the given answers…
A: Degree of operating leverage means the division of contribution with net income. It means that how…
Q: If the percentage change in operating income resulting from a given percentagechange in sales is…
A: Operating Leverage is the % change in EBIT to the % change in sales. It shows how much the EBIT…
Q: XYZ Company wishes to gain more market share. In order to do that, the company is planning to double…
A: Selling price: Selling price is a price set by the supplier at which he is ready to sell his goods.…
Q: Which of the following statements about operating leverage is false? O a. Keeping all factors…
A: Operating leverage: It is a cost account accounting method or technique used by the firm to measure…
Q: Which of the following is true regarding the contribution margin ratio of a company that produces…
A: Contribution margin ratio=Contribution per unitSales price per unit Contribution per unit = Sales…
Q: comparative income approach,
A: Particulars If continued (Amount in RM) If dropped (Amount in RM) Sales 60000 Variable…
Q: Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O…
A: Fixed cost indicates the cost which remains constant to a certain level of activity after which the…
Q: Compared to companies that have a cost structure that is mainly comprised of variable costs,…
A: Ans. Mostly companies incur two types of cost - Variable cost or fixed cost. Variable cost changes…
Q: Company A's operations involve a fixed cost of £1m and variable costs equal to 70% of revenues.…
A: SOLUTION- FORMULA- DEGREE OF OPERATING LEVERAGE = CONTRIBUTION / EARNING BEFORE INTEREST AND TAX .…
You are analyzing Becker Corporation and Newton Corporation and have concluded that Becker has a higher operating leverage factor than Newton. Which one of the following choices correctly depicts (1) the relative use of fixed costs (as opposed to variable costs) for the two companies and (2) the percentage change in income caused by a change in sales?
- (1) Lower for Becker (2)Lower for Becker
- (1) Greater for Becker (2) Greater for Becker
- (1) Greater for Becker (2) Equal for both
- (1) Lower for Becker (2) Greater for Becker
- (1) Greater for Becker (2) Lower for Becker
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- IA Cost is divided by the change in units. CLEAR MY CHOICE Which of the following statements about operating leverage is false? O a. If the degree of operating leverage higher for a company, this means that the company is more risky than another company with low degree of operating leverage. O b. Operating leverage measures how operating income will be affected by changes in sales O C. All of the given answers are true. O d. The degree of operating leverage is higher for companies with higher fixed costs O e. Keeping all factors constant, the higher the contribution margin, the lower the operating leverage. NEXT PAG GE ere to searchIf the percentage change in operating income resulting from a given percentagechange in sales is higher than the percentage change in sales itself, thena. an increase in the selling price would not alter the contribution marginper unit.b. variable costs per unit have increased.c. variable costs have decreased in total.d. the company has operating leverage.e. the company has no fixed costs.Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? Select one: a. The contribution margin ratio equals the selling price per unit less the variable expense ratio. b. The contribution margin per unit multiplied by the selling price per unit equals the contribution margin ratio. c. None of the given answer is correct. d. As fixed expenses decrease, the contribution margin ratio increases. e. The contribution margin ratio will decline as unit sales decline.
- XYZ Company wishes to gain more market share. In order to do that, the company is planning to double the current production and sales quantity. However, due to high commission fees, the variable cost per unit is also expected to double. Assuming that the selling price per unit and fixed costs remain unchanged, what would be the effect on ?profit .a Profit would increase .b Profit would decrease .C Cannot be determined using the .information in the question .d Profit would remain unchanged .e None of the given answersFor CVP analysis calculations, which of the following statements is correct? A. In target profit calculations, sales revenue is less than total costs. B. CVP analysis relies on our knowledge of cost function to express relationships among costs, sales volume, and profit. OC. A company's sales mix is ultimately determined by the management of a company. D. The Break-even point is the point at which operating income is greater than $0. O E. If sales volume is expected to be higher than the indifference point, management should choose the cost structure with the higher fixed costs.Which of the following statements about operating leverage is false? a. Operating leverage measures how operating income will be affected by changes in sales b. The degree of operating leverage is higher for companies with lower fixed costs c. Keeping all factors constant, the higher the contribution margin, the higher the operating leverage. d. All of the given answers are true. e. If the degree of operating leverage higher for a company, this means that the company is more risky than another company with low degree of operating leverage.
- XYZ Company wishes to gain more market share. In order to do that, the company is planning to double the current production and sales quantity. At the same time, the company plans to decrease the selling price per unit by half. Assuming that the total fixed cost and the variable cost per unit remain unchanged, what would be the effect on profit? O a. Profit would increase Ob. Profit would remain unchanged Oc. None of the given answers O d. Cannot be determined using the information in the question. O e. Profit would decrease on Which of the following statements about margin of safety is false? O a. If only the fixed costs decrease but the number of units sold and unit selling price and unit Fin n.squ.edu.om/mod/quiz/attempt.php?attempt=1893260&cmid=891193&page=3#question-2134787-30 + F1 F2 F3 F4 F6 F7 FB 23 & of 1 4 6 7 Q W E T Y G Y J K C 24 Alt RWhich of the following statements about operating leverage is false? O a. All of the given answers are true. O b. Keeping all factors constant, the higher the contribution margin, the higher the operating leverage. OC. Operating leverage measures how operating income will be affected by changes in sales O d. If the degree of operating leverage higher for a company, this means that the company is more risky than another company with low degree of operating leverage. The degree of operating leverage is higher for companies with lower fixed costs O e.XYZ Company wishes to gain more market share. In order to do that, the company is planning to double the current production and sales quantity. At the same time, the company plans to decrease the selling price per unit by half. Assuming that the total fixed cost and the variable cost per unit remain unchanged, what would be the effect on profit? O a. Cannot be determined using the information in the question. O b. None of the given answers Oc. Profit would increase O d. Profit would remain unchanged Oe. Profit would decrease
- Let’s say that two firms, A and B have positive profit margins. B’s fixes costs as a percentage of total costs exceeds A’s percentage. Assume both firms experience an equal percentage increase in revenue. Which firm will enjoy a greater percentage increase in profit as a result? A) A B) B C) they will be equalWhich of the following is true regarding the contribution margin ratio of a company that produces onlya single producct? Select one: O a. As fixed expenses decrease, the contribution margin ratio is unaffected. Ob.The contribution margin ratio equals the selling price per unit less the variable expense ratio. O c The contribution margin ratio divided by the selling price per unit equals the contribution margin per unit. Od. None of the given answer is correct. Oe. The contribution margin ratio will decline as unit sales decline.Which of the following statements about operating leverage is false? O a. If the degree of operating leverage higher for a company, this means that the company is more riskyt another company with low degree of operating leverage. O b. Keeping all factors constant, the higher the contribution margin, the lower the operating leverage. O c. Operating leverage measures how operating income will be affected by changes in sales O d. All of the given answers are true. The degree of operating leverage is higher for comnanies with higher fived costs = here to search - hp %23 6. 7 V 3 4 W E R T' Y 岁 S D F G H K. V M. Σ 00 近
