Athletico, Inc. manufactures warm-up suits. The company's projected income for the coming year, based on sales of 160,000 units, is as follows: Sales Operating expenses: Variable expenses Fixed expenses Total expenses Net income $8,000,000 $ 2,000,000 3,000,000 5,000,000 $3,000,000 Compute Athletico's operating leverage factor, based on the budgeted sales volume for the year. Compute Athletico's required sales in dollars in order to earn income of $4,500,000 in the coming year. Show the Athletico's cost structure and indicate the percentage of the Athletico's revenue represented by each item on the income statement..
Athletico, Inc. manufactures warm-up suits. The company's projected income for the coming year, based on sales of 160,000 units, is as follows: Sales Operating expenses: Variable expenses Fixed expenses Total expenses Net income $8,000,000 $ 2,000,000 3,000,000 5,000,000 $3,000,000 Compute Athletico's operating leverage factor, based on the budgeted sales volume for the year. Compute Athletico's required sales in dollars in order to earn income of $4,500,000 in the coming year. Show the Athletico's cost structure and indicate the percentage of the Athletico's revenue represented by each item on the income statement..
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Athletico, Inc. manufactures warm-up suits. The company's projected income for the coming year, based on sales of
160,000 units, is as follows:
Sales
Operating
expenses:
Variable
expenses
Fixed
expenses
Total
expenses
Net income
$8,000,000
$ 2,000,000
3,000,000
5,000,000
$ 3,000,000
Compute Athletico's operating leverage factor, based on the budgeted sales volume for the year.
Compute Athletico's required sales in dollars in order to earn income of $4,500,000 in the coming year.
Show the Athletico's cost structure and indicate the percentage of the Athletico's revenue represented by each item on
the income statement..
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