Subject-general accounting A company is currently operating with a high degree of fixed costs,which results in a degree of operating leverage (DOL) of 4.0. Duringthe last quarter, management reported that operating profitsincreased by 8% compared to the previous quarter. Based on thisinformation, calculate the percentage change in sales that wouldhave caused this change in profit.

To calculate the percentage change in sales that caused the 8% increase in operating profits, we can…

Answered: A company is currently operating with a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 6EB: During the current year, Plainfield Manufacturing earned income of $845,000 from total sales of...

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Company A's gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible cause for this decline in the gross profit rate? O Company A's average margin between unit selling price and inventory unit cost is decreasing. O Company A may have seen a decline in total gross profit while maintaining net sales. Company A may have begun selling products with a higher markup. O Company A must have paid higher prices to suppliers without passing these costs on to customers.
Prada Solutions reported net sales for the year of $3,120,000 and cost of goods sold of $2,430,000 for its existing product lines. A new service line is being considered, and the expected selling price per unit cannot exceed $85 to stay competitive in the market. Calculate the gross profit and the gross profit ratio for the year.
17. During the current year, the net sales of Regine Company, were 10% below last vear's level. You should expect Regine's semi-variable costs to Increase in total and increase as a percentage of sales. b. Decrease in total and decrease as a percentage of sales. Deerease in total, but increase as a percentage of sales. d. Increase in total, but decrease as a percentage of sales. C.
The following income statement applies to Franklin Company for the current year: Income Statement Sales revenue (410 units × $31) Variable cost (410 units × $16) Contribution margin Fixed cost Net income 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 Franklin Company will earn If It experiences a 10 percent increase in revenue. The sales price per unit is not affected. c-1. Verify your answer to Requirement b by constructing an income statement based on a 10 percent increase in sales revenue. The sales price is not affected. c-2. Calculate the percentage change in net income for the two income statements. Req A and B Complete this question by entering your answers in the tabs below. Req C1 a. Operating leverage b. Net income $ $12,710 (6,560) 6,150 (4,100) $2,050 > Answer is complete but not entirely correct. Req C2 a. Use the…
Please provide the correct answer to this general accounting problem using accurate calculations.
Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent. Several possible changes that Solano could face in the upcoming year follow. Determine each scenario’s impact on Solano’s ROI and residual income. (Note: Treat each scenario independently.)a. Company sales and cost of goods sold increase by 40 percent. What is the residual income? Thanks
Please explain the correct approach for solving this general accounting question.
Can you solve this general accounting question with accurate accounting calculations?
the actual profit is
Dejounte Corp had a margin of safety of $108,503 last month, with sales revenue of $819,291 and fixed costs of $334,301. How much profit did Murray earn last month? Do not round the intermediate steps.
What will be the percentage increase in profit
I need help with this General accounting question using the proper accounting approach.

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