Calculate the degree of operating leverage (Round to 2 decimal places): Wilson Company prepared the following contribution format income statement based on a sales volume of 3,500 units (the relevant range of production is 2,000 units to 5,000 units): Sales $73,500 Variable expenses $42,000 Contribution margin $31,500 Fixed expenses $19,600 Net operating income $11,900

Calculate the degree of operating leverage (Round to 2 decimal places): Wilson Company prepared the following contribution format income statement based on a sales volume of 3,500 units (the relevant range of production is 2,000 units to 5,000 units): Sales $73,500 Variable expenses $42,000 Contribution margin $31,500 Fixed expenses $19,600 Net operating income $11,900

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2BE: Contribution margin Waite Company sells 250,000 units at 120 per unit. Variable costs are 78 per...

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Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $ 3,220 Questions: A) Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.) B) Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $3,780 and the total fixed expenses are $13,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.) C) Assume that the amounts of the company’s total variable expenses and total fixed…
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