Please find the answer At an output level of 16,500 units, you havecalculated that the degree of operatingleverage is 2.80. The operating cash flow is$63,500 in this case. Ignoring the effect oftaxes, what are fixed costs? What will theoperating cash flow be if output rises to17,500 units? What will the operating cashflow be if output falls to 15,500 units?

To solve this problem, we need to understand the concept of operating leverage and how it relates to…

Answered: At an output level of 16,500 units, you…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EB: Assume a company is going to make an investment in a machine of $825,000 and the following are the...

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At an output level of 40,000 units, you calculate that the degree of operating leverage is 3.19. If the output rises to 44,000 units, what will the percentage change in operating cash flow be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in OCF
At an output level of 40,000 units, you calculate that the degree of operating leverage is 2.70. If output rises to 46,800 units, what will the percentage change in operating cash flow be? (Do not round your intermediate calculations.) Multiple Choice 45.90% 39.23% 48.20%
Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage. Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?
What will the percentage change in operating cash flow?
I have the following additional questions: 1) Calculate the breakeven point in dollars under the current scenario 2) Calculate the number of units to be sold if the company desires a target profit of $225,000. 3) Calculate the sales dollars if the company desires a target profit of $225,000.
Imagine that you could increase the price for a product that has a profit margin of 8% on its price. If you could increase the price by 1% AND simultaneously keep the sales volume (in unit terms) at the same level as before the price increase, calculate the impact of this price increase on the profit margin. (For this question, assume there are no fixed costs. You just need to calculate the PERCENTAGE CHANGE in profit margin)
Assume the following (1) total sales = $200,000 (2) breakeven sales = $120,000, and (3) total fixed expenses = $50,000. Given these three assumptions, the margin of safety is: Multiple Choice $80,000. $30,000. $70,000. $150,000.
If TechCor has fixed cost of $60,000 variable costs of $1.20/unit, a sale price/unit of $7 and depreciation expense of $25,000 what is its cash break even in units?
Sales Beer sales Food sales Other sales Total sales Less cost of sales Gross margin Less marketing and administrative expenses Operating profit of pursuing capital through private investors and financial insti Sales Beer sales (48% of total sales) Food sales (55% of total sales) Other sales (5% of total sales) Total sales Variable Costs Beer (15% of beer sales). Food (35% of food sales) Other (33% of other sales) Wages of employees (25% of sales) Supplies (1% of sales) Utilities (3% of sales) Other: credit card, miscellaneous (2% of sales) Total variable costs Contribution margin Fixed Costs Salaries: manager, chef, brewer Maintenance Advertising Other: cleaning, menus, miscellaneous Insurance and accounting Property taxes Depreciation $ 789,208 1,885,158 98,658 $ 1,973,000 530,738 $1,442,262 1,128,430 $ 313,832 Debt service (interest on debt) Total fixed costs Operating profit $ 789,200 1,885,158 98,650 $ 118,388 379,803 32,555 493,258 19,730 58,898 39,268 $ 135,500 30,200 28,200…
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Ranger Corporation is currently selling widgets for $40 at a cost of $20 per unit. Fixed costs are currently $500 and the current production is 100 widgets. What is the Operating Cash Flow at this output level?
Management believes it can sell a new product for $7.50. The fixed costs of production are estimated to be $4,500, and the variable costs are $3.90 a unit. a. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar Enter zero if necessary. Use a minus sign to enter losses, if any Quantity Variable Costs Fixed Costs 0 500 1,000 $ $ $ S 2,500 $ 3,000 S 1,500 2,000 Total Revenue S Quantity $ $ Total Revenue $ $ $ $ $ $ $ $ $ S Fixed Costs $ $ Total Costs b. Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs, and profits (losses) to the nearest dollar. Enter zero if necessary Use a minus sign to enter losses, if any Variable…

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