Financial accounting During the most recent fiscal period, NexusManufacturing had a contribution margin of $75,000and an operating profit of $25,000 on sales of $120,000.Calculate Nexus's:a) operating leverage, andb) the amount of its profit for next year assuming salesincrease to $144,000.

Step 1: Define Operating LeverageOperating leverage measures how a company's operating income…

Answered: During the most recent fiscal period,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 6EB: During the current year, Plainfield Manufacturing earned income of $845,000 from total sales of...

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During the most recent fiscal period, Nexus Manufacturing had a contribution margin of $75,000 and an operating profit of $25,000 on sales of $120,000. Calculate Nexus's: a) operating leverage, and b) the amount of its profit for next year assuming sales increase to $144,000.