Opereting income expected for the next year? Brightstar Company had originally expected to earn an operating income of $160,000 in thecoming year. Brightstar's degree of operating leverage is 2.8. Recently, Brightstar revised itsplans and now expects to increase sales by 18% next year. What is the percent change inoperating income expected for the next year?

Apply the Formula% Change in Operating Income = 2.8 * 18% % Change in Operating Income = 50.4%…

Answered: Brightstar Company had originally…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter22: Master Budget (master)

Section: Chapter Questions

Problem 5R: Suppose the company has just the opposite news and now expects unit sales for August, September, and...

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Smiley Corporations current sales and partial balance sheet are shown here. Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities?
Poleski Manufacturing, which maintains the same level of inventory at the end of each year, provided the following information about expenses anticipated for next year: The selling price of Poleskis single product is 16. In recent years, profits have fallen and Poleskis management is now considering a number of alternatives. Poleski wants to have a net income next year of 250,000, but expects to sell only 120,000 units unless some changes are made. The president of Poleski has asked you to calculate the companys projected net income (assuming 120,000 units are sold) and the sales needed to achieve the companys net income objective for next year. Also, compute Poleskis contribution margin per unit, contribution margin ratio, and break-even point for next year. The worksheet CVP has been provided to assist you. Note that the data from the problem have already been entered into the Data Section of the worksheet.
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Shorter company had originally expected to earn operating solve this question solution
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Cordell, Inc., has an operating leverage of 3. Sales are expected to increase by 9% next year. What is the expected change in operating income next year?
None
Opereting income? Accounting question
Need answer
Q.2) Laraby Company produces a single product. It sold 25,000 units last year with the following results. Sales Variable costs Fixed costs 625,000 375,000 150,000 100,000 45,000 55,000 Income before taxes Income taxes (45%) After-tax profit In an attempt to improve its product, Laraby's managers are considering replacing a component part that costs $2.50 with a new and better part costing $4.50 per unit during the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $18,000 and have a useful life of 6 years with no salvage value. The company uses straight-line depreciation on all plant assets.
The Frozen North Construction Company would like to forecast its minimum volume of work (turnover) in order to “break even” (i.e., cover its corporate overheads) for the coming year. The company’s previous year’s corporate overheads were $900,000. The company anticipates 22% inflation and 6% growth in the firm for the coming year. It also expects to achieve a gross margin of 13% on its projects, based on old experience. The company defines gross margin as a percentage of revenue (i.e., selling price). Determine the minimum volume of work, which will allow the Frozen North Company to break even at the end of the coming year.
A product has sales of $7M this year, but sales are expected to decline at 10% per year until it is discontinued after year 5. If the firm’s interest rate is 15%, calculate the PW of the revenues.

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