1. Meyer Appliance Company makes cooling fans. The firm's income statement is as follows:Sales (7,000 fans at $20) .$140,000Less: Variable costs (7,000 fans at $8..56,000Fixed operating costs.44,000Earnings before interest and taxes (EBIT).$ 40,000Interest ( 1) ..Earnings before taxes (EBT).10,000$ 30,0006,000.$ 24,000$ 6,000Taxes (T) .Earnings after taxes (EAT).Preferred stock dividends (PD)..Compute:a. The break-even point.b. Degree of operating leverage.c. Degree of financial leverage.d. Degree of total leverage.

1. Meyer Appliance Company makes cooling fans. The firm's income statement is as follows: Sales (7,000 fans at $20).. $140,000 Less: Variable costs (7,000 fans at $8). 56,000 Fixed operating costs.. Earnings before interest and taxes (EBIT). Interest ( 1) . 44,000 .$ 40,000 10,000 $ 30,000 . 6,000 .$ 24,000 Earnings before taxes (EBT) Taxes (T) . Earnings after taxes (EAT). Preferred stock dividends (PD). .$ 6,000 Compute: a. The break-even point. b. Degree of operating leverage. c. Degree of financial leverage. d. Degree of total leverage.

1. Meyer Appliance Company makes cooling fans. The firm's income statement is as follows: Sales (7,000 fans at $20).. $140,000 Less: Variable costs (7,000 fans at $8). 56,000 Fixed operating costs.. Earnings before interest and taxes (EBIT). Interest ( 1) . 44,000 .$ 40,000 10,000 $ 30,000 . 6,000 .$ 24,000 Earnings before taxes (EBT) Taxes (T) . Earnings after taxes (EAT). Preferred stock dividends (PD). .$ 6,000 Compute: a. The break-even point. b. Degree of operating leverage. c. Degree of financial leverage. d. Degree of total leverage.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Company XYZ produces and sells 40,000 units.at this levelthe company is making a profit of $37,000 . Assuming total fixed expenses of $3,000 and variable expenses per unit of $2, how much was the selling price per unit ? a. 1 b. 4 c. 8 d. 3 e. 6
Company XYZ made total sales of $250,000 during the month of December. The company also incurred total expenses of $210,000. Of that amount 60% was fixed expenses. Company XYZ expects sales to increase by 13% next month. What is the expected operating profit, in ($) value, next month?Select one:a. 45,200b. 61,580c. None of the given answersd. 166,000e. 40,000
1. Shown below is an income statement in the traditional format for Ellie Inc, which has a contribution margin ratio of 25%. Sales ...... Cost of goods sold... Gross profit...... Operating expenses: Selling... Administrative.... Operating income $100,000 (70,000) $ 30,000 (5,000) (10,000) $ 15,000 Prepare an income statement in the contribution margin format. b. Calculate the sales per unit, variable expense per unit, and contribution margin per unit if 10,000 units were produced and sold. c. Calculate the cost formula (Y=a+bX). d. Calculate the firm's break even point in units.
1. Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month's income statement of Aladin is given below: Sales (30,000 batteries) Less variable expenses Contribution Margin Fixed expenses Net operating income Total $300,000 $180,000 $120,000 $100,000 $20,000 Per Unit $10 $6 $4 Required: Prepare Aladin's new income statement under each of the following conditions: 1. The sales colume increase by 15%. 2. The selling price decreases by 20% per unit, and the sales volume increase by 30%. 3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5%. 4. Variable expenses increases by 20% per unit, the selling price increase by 12%, and the sales volume decrease by 10%.
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SOLE Brother Company has 2 product lines. Hiking boots and fashion boots. Income statement data for the most recent year follow: Total Hiking boots Fashion boots sales revenue RM510,000.00 RM370,000.00 RM140,000.00 variable expenses RM355,000.00 RM235,000.00 RM120,000.00 contribution margin RM155,000.00 RM135,000.00 RM20,000.00 fixed expenses RM81,000.00 RM40,500.00 RM40,500.00 operating income (loss) RM74,000.00 RM94,500.00 -RM20,500.00 Do need to drop or keep the Fashion boots? Why?
Great Inc.'s contribution margin ratio is 48% and its fixed monthly expenses are $36,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $140,000? A. $13,440 B. $23,740 C. $67,000 D. $31,200
Dogs R Us has two product lines: collars and leashes. Income statement data forecasted for next year is as follows: COLLARS LEASHES TOTAL Sales revenue $210,000 $150,000 $360,000 Variable expenses $135,000 $120,000 $255,000 $75,000 Contribution margin $30,000 $105,000 Fixed expenses $56,000 $38,000 $94,000 Operating income (loss) $19,000 ($8,000) $11,000 If $21,584 in fixed costs will be eliminated by dropping the LEASHES line, how will TOTAL operating income be affected after the Leashes line is dropped? If income drops, use a negative sign in front of the number. ASUS 13 f4 15 X f8 f9 f10 f11 f12 & 5. 8. 9.
Strong Key Pte. Ltd, manufactures a key for houses with the selling price $7/per unit. Each key has variable cost per unit $4.- Fixed Cost $60.000/per year. Interest expense for obligation is $15.000,- per year and divided for preferred stock every year is $7.500. Annual sales for this year are 40.000 units. Tax is 30%. a. Calculate and make a graph BEP Strong Key Pte.Ltd. b. Calculate EBIT and Earning Available for Common Stockholders. c. Calculate DOL, DFL, and DTL. d. If Strong Key can add sales in units 20.000 units and become 60.000 units, what is the new EBIT?
a. If Canace Company, with a break-even point at $244,200 of sales, has actual sales of $370,000, what is the margin of safety evpressed (1) in doilars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2.
If this year Eloise Ltd. had sales of $750,000, fixed costs of $150,000, and variable costs of $350,000, what is the margin of safety in dollars?(round numbers within the calculations to 2 decimal places and choose the closest whole number) $400,000 $466,981 $450,000 $425,650

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