The following are ABC’s balances for last month: sales, P2 million; variable expenses, P1.4 million; fixed expenses, P360,000. The company has no beginning and ending inventories. A total of 40,000 units were produced and sold last month. What is the company’s degree of operating leverage?
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The following are ABC’s balances for last month: sales, P2 million; variable expenses, P1.4 million; fixed expenses, P360,000. The company has no beginning and ending inventories. A total of 40,000 units were produced and sold last month. What is the company’s degree of operating leverage?
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- Portis, Inc. reported sales of $8,000,000 for the month and incurred variable expenses totaling $5,600,000 and fixed expenses totaling $1,440,000. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. (Note that this is the same data that was provided for the previous question.) What is the company's degree of operating leverage? 0.12 A) 0.4 B) Page 3 of 4Melb Corporation reported the following data for its most recent year: sales, $570,000; variable expenses, $270,000; and fixed expenses, $240,000. The company's degree of operating leverage is closest to:Last month when Oriental Creations, Incorporated, sold 36,000 units, total sales were $144,000, total variable expenses were $116,640, and fixed expenses were $37,800. Required: What is the estimated increase in the company's net operating income if it can increase total sales by $2,600? Note: Do not round intermediate calculations. Estimated increase in net operating income
- One of ABC product line has been unprofitable for the past 18 months. The latest monthly income statement for the product line is as follows: Sales revenue 19,000 Less: Cost of sales 8,500 Gross profit 10,500 Operating expenses Depreciation 2,750 Insurance 1,400 Manager salary 1,100 Supplies 1,750 Utilities 1,100 Wages 5,000 Total operating expenses 13,100 Profit or loss (2,600) In relation to the operating expenses, utilities, manager salary and $2,000 of the depreciation expense are allocated to this product line. Required: Assume that the sales of other product lines will not be affected by the decision, evaluate whether the unprofitable product line should be disestablished from a financial standpoint.During the last accounting period, Sheridan Corporation sold 92000 units at $45 each. The variable cost per unit was $20 per unit. Fixed costs totaled $1100000. What is the company's degree of operating leverage? 1.80 O 1.92 0.48 0.60Walsh Corporation has two divisions: East and West. Data from the most recent month appear below: East West Sales $ 330,000 $144,000 Variable expenses $ 132,000 $ 76,320 Traceable fixed expenses $ 140,000 $ 43,000 The company's common fixed expenses total $52,140, If the company operates at exactly the break even sales of the East Division and West Diveion, what would be the company's overall net operating income? Select one: O a $30,540 O b. 50 OC ($52,140) Od. ($235,140)
- Midlands Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 80,000 units of product: net sales $2,000,000; total costs and expenses $2,235,000; and net loss $235,000. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $1,568,000 $1,050,000 $518,000 Selling expenses 517,000 92,000 425,000 Administrative expenses 150,000 58,000 92,000 $2,235,000 $1,200,000 $1,035,000 Management is considering the following independent alternatives for 2022. 1. Increase unit selling price 25% with no change in costs and expenses. 2. Change the compensation of salespersons from fixed annual salaries totaling $200,000 to total salaries of $40,000 plus a 5% commission on net sales. 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50Blossom Corp.’s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 575,500 units of product: sales $2,877,500, total costs and expenses $2,984,880, and net loss $107,380. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,455,420 $1,887,640 $567,780 Selling expenses 287,750 105,892 181,858 Administrative expenses 241,710 78,268 163,442 $2,984,880 $2,071,800 $913,080 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 20% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $172,650 to total salaries of $69,060 plus a 4% commission on sales. Compute the break-even point in dollars for 2020. Break-even point $…Last month when Holiday Creations, Inc., sold 45,000 units, total sales were $289,000, total variable expenses were $236,980, and fixed expenses were $35,400. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1,700? (Do not round intermediate calculations.) 1. Contribution margin ratio % 2. Estimated change in net operating income
- During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000, 000. What is the sales margin?During the current year. Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. What is the sales margin?During the current year, Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?