Need answer Bright Fashions is a clothing store that sells men's shirts. Their variable cost per shirt is $22, and the salesprice is $42. Bright Fashions plans to sell 450,000 shirts for the year, and they expect a before-tax profitof $3,000,000 at this volume. Additionally, they received an extra $15,000 from the sale of an oldcompany vehide. What is the degree of operating leverage (DOL) at this volume level? CosmosEnterprises provides the following partial income statement: Sales: $1,500,000 Less: Variable costs:$700,000 Contribution Margin: $800,000 Less: Fixed costs: $350,000 Maintenance Costs: $50,000NetOperating Income: $450,000Requirement: What is Cosmos Enterprises' degree of operating leverage?Options:1.574.381.862.00

Bright Fashions' Degree of Operating Leverage (DOL):To calculate Bright Fashions' Degree of…

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 16E

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Bright Fashions is a clothing store that sells men's shirts. Their variable cost per shirt is $22, and the sales price is $42. Bright Fashions plans to sell 450,000 shirts for the year, and they expect a before-tax profit of $3,000,000 at this volume. Additionally, they received an extra $15,000 from the sale of an old company vehide. What is the degree of operating leverage (DOL) at this volume level? Cosmos Enterprises provides the following partial income statement: Sales: $1,500,000 Less: Variable costs: $700,000 Contribution Margin: $800,000 Less: Fixed costs: $350,000 Maintenance Costs: $50,000Net Operating Income: $450,000 Requirement: What is Cosmos Enterprises' degree of operating leverage? Options: 1.57 4.38 1.86 2.00
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Green Apparel is a retail men's clothing store. Green's variable cost is $18 per shirt, and the sales price is $38 per shirt. Green plans to sell 350,000 shirts for the year, and at this level, they would generate a before-tax profit of $2,100,000. Green Apparel also received a discount of 5% on their office furniture, which cost $10,000. What is the DCL at this volume level? Nara Industries presents its partial income statement as follows: Sales: $2,000,000 Less: Variable costs: $1,200,000 Contribution Margin: $800,000 Less: Fixed costs: $300,000 Additional Staff Bonuses: $25,000 Net Operating Income: $500,000 Requirement: What is Nara Industries' degree of operating leverage? Options: 5.66 2.90 2.67 3.05
Green Apparel is a retail men's clothing store. Green's variable cost is $18 per shirt, and the sales price is $38 per shirt. Green plans to sell 350,000 shirts for the year, and at this level, they would generate a before-tax profit of $2,100,000. Green Apparel also received a discount of 5% on their office furniture, which cost $10,000. What is the DOL at this volume level? Nara Industries presents its partial income statement as follows: Sales: $2,000,000 Less: Variable costs: $1,200,000 Contribution Margin: $800,000 Less: Fixed costs: $300,000 Additional Staff Bonuses: $25,000 Net Operating Income: $500,000 Requirement: What is Nara Industries' degree of operating leverage? Options: 5.66 2.90 2.67 3.05
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Urban Styles is a retail store selling men's apparel. The variable cost per shirt is $25, and the sales price is $45 per shirt. Urban Syles expects to sell 500,000 shirts this year, which would generate a before-tax profit of $4,000,000. Additionally, the company received a $20,000 grant from the city to renovate its building. DOL? Nova Tech's partial income statement is provided as follows: Sales: $1,000,000 Less: Variable costs: $500,000 Contribution Margin: $500,000 Less: Fixed costs: $250,000 One-Time Charity Donation: $100,000 Net Operating Income: $250,000 Requirement: What is Nova Tech's degree of operating leverage? Options: 8.25 9.50 5.00 6.50
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GPXVZG300 Corp. is a merchandiser that sells it's product for $36 per unit. Variable expenses are $18 per unit, and fixed expenses total $17,000 annually. (ID#45225) Assume that GPXVZG300 sold 21,600 units last year. The manager wants to increase the sales commission by $0.9 per unit. He thinks that this move, combined with some increase in advertising, would double annual unit sales. Q: By how much could advertising be increased with GPXVZG300's profits remaining unchanged? A: $ 4 of 25 Next > < Prev raw ill MacBook Pro
Perfect Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of 50 with 40 in variable costs of goods sold. The company has fixed manufacturing costs of 1500000 and fixed marketing costs of 300000. Sales commissions are paid to the wholesale sales reps at 5% of revenues. The company has an income tax rate of 20%. (include formulas) How many jeans must Perfect Fit sell in order to break even? How many jeans must the company sell in order to reach A target operating income of$520,000? A net income of$520,000? How many jeans would Perfect Fit have to sell to earn the net income in requirement above if (Consider each requirement independently.) The contribution margin per unit increases by 20% The selling price is increased to $52.00. The company outsources manufacturing to an overseas company, increasing variable costs per unit by $3.00 and saving 70% of fixed manufacturing costs.

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