What is the operating leverage? Bucket Corporation had the following income statement:Sales$50,000Less: Variable costs $28,000Contribution margin $22,000Less: Fixed costs$16,000Net income$6,000Bucket's operating leverage isa. 0.333b. 2c. 3.667d. 2.333

Step 1: Define Operating LeverageOperating leverage is a management accounting term that relates to…

Answered: Bucket Corporation had the following…

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 29E

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The following information is for Alex Corp: Product X: Revenue Variable Cost Product Y: Revenue Variable Cost Total fixed costs $12.00 $4.50 $25.00 $10.00 $40,500 What is the operating income, assuming actual sales total 120,000 units, and the sales mix is two units of Product X and one unit of Product Y? 1,960,000 1,240,500 1,200,000 1,159,500
Market has three divisions (Chad, Talbot, and Heather) with the following information: Chad Talbot Heather Total $60,000 $50,000 $40,000 $150,000 $35.000 $28.000 $30.000 $93.000 $25,000 $22,000 $10,000 $57.000 $5.500 $4.500 $6.500 $16.500 Sales Revenue Var, cost CM Less: Direct Fixed Cost Segment Margin $19.500 $17,500 $3,500 $40,500 Less: Common Fixed Costs $11.000 $10.500 $6.000 $27.500 Net Operating Income (Loss) $8.500 $7.000 ($2.500) $13.000 Now suppose that $4,000 of the common foxed costs could be avoided if the Heather division was eliminated. Now how much will Market's net operating income increase or decrease if Heather is eliminated? $500 increase O $500 decrease $1.500 decrease 500 increase
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The following information is available for Concord Corporation: Total fixed $150000 expenses == Total variable. 320000 expenses Sales Cost of goods sold $570000 370000 A CVP income statement would report O gross profit of $250000, contribution margin of $420000. Ogross profit of $200000. O contribution margin of $250000.
genow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Lo... r Operating Leverage Teague Co. reports the following data: Sales Variable costs Contribution margin Fixed costs $480,000 264,000 $216,000 175,200 $40,800 Income from operations Determine Teague Co.'s operating leverage. Round your answer to one decimal place.
8) Ahmet Company has three products, A, B, and C. The following information is available: A B с Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income $70,000 37,000 33,000 10,000 7.000 $16,000 $97,000 51.000 46,000 20,000 12,000 $14.000 $23,000 15,000 8,000 2,000 9.400 $ (3,400) Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C and does NOT replace it, operating income will A) increase by $3,400 B) increase by $2,000 C) decrease by $6,000 D) decrease by $11,400
Assume a company reported the following results: Sales $ 400,e00 Variable expenses Contribution margin Fixed expenses 260,e00 140,000 96,e00 Net operating income $ 44,000 Average operating assets $ 350, 000 The margin is closest to: Muitiple Choice 12.9%. 35.0%. 114.3%.
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $295,300 $834,000 Variable costs 118,500 500,400 Contribution margin $176,800 $333,600 Fixed costs 124,800 194,600 Income from operations $52,000 $139,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
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An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: Selling price per unit Variable cost per unit Minutes on the constraint Multiple Choice Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places.) LN, JQ, RQ RQ, LN, JQ RQ, JQ, LN JQ, RQ, LN $ $
Asha Inc. and Samir Inc. have the following operating data: Sales Variable costs Contribution margin Fixed costs Asha Inc. $2,500,000 (1,500,000) $1,000,000 (800,000) $200,000 Asha Inc. Samir Inc. Samir Inc. $4,000,000 (2,500,000) $1,500,000 (900,000) $600,000 Operating income a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. 150 75 Samir Inc. b. How much would operating income increase for each company if the sales of each increased by 30%? Dollars Percentage 30 % 30 % c. The difference in the increases of operating income is due to the difference in the operating leverages. Asha Inc.'s higher operating leverage means that its fixed costs are a smaller Inc.'s. percentage of contribution margin than are Samir

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