Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format incomestatement follows:SalesVariable expensesContribution marginFixed expensesNet operating incomeAmount$ 88,00035,20052,80041,360$ 11,440.Percent ofSales100%40%60%Required:1. What is the company's degree of operating leverage?2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales.3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.

The contribution format income statement shows how variations in sales volume impact a company's…

Engberg Company installs lawn sod in home yards. The company's most re statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income. Amount $ 88,000 35,200 52,800 41,360 $ 11,440 Percent of Sales 100% 40% 60%

Engberg Company installs lawn sod in home yards. The company's most re statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income. Amount $ 88,000 35,200 52,800 41,360 $ 11,440 Percent of Sales 100% 40% 60%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 86,000 100% Variable expenses 34,400 40% Contribution margin 51,600 60% Fixed expenses 40, 420 Net operating income $ 11,180 Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales.
Company XYZ made total contribution margin of $ 300,000 and a net income of $ 140,000. The company also made a total gross margin of $ 270,000. Assume that the variable selling and administrative expenses were $ 80,000, how much is the fixed manufacturing cost ($)? O a. None of the given answers O b. 160,000 Oc 130,000 O d. 50,000 O e 110,000
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Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100% Variable expenses 52,000 40% Contribution margin 78,000 60% Fixed expenses 20,000 Net operating income $ 58,000 Required: What is the company’s degree of operating leverage? Using the degree of operating leverage, estimate the impact on net operating income of a 25% increase in unit sales. (not able to upload a third image) but I need the correct answer to what is the "net operating income" Construct a new contribution format income statement for the company assuming a 25% increase in unit sales.
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