Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:Percent ofSales100%4060%SalesVariable expensesContribution marginFixed expensesNet operating incomeAmount$ 90,00036,000Required: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.Required 154,00043,200$ 10,800Complete this question by entering your answers in the tabs below.Required 2 Required 3What is the company's degree of operating leverage?Note: Round your answer to 2 decimal places.Degree of operating leverage

The objective of the question is to calculate the degree of operating leverage for Engberg Company,…

Answered: Engberg Company installs lawn sod in…

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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Determine the new operating income using the following assumptions:Selling Price/unit: $27Variable Cost/unit: 18Unit Sales Volume: 25,000 units Total Sales: $550,000 Less: Variable Expenses Variable CGS Starting Materials 10,000 Materials Purchased 165,000 Ending Materials 31,000 Materials Used 144,000 Production Labor 202,000 Electricity--production 35,000 Variable admin expenses Electricity--office 10,000 Contribution Margin 159,000 Contribution Margin Ratio 0.29 Less: Fixed Expenses Factory Supervision 40,000 New Tech 45,000 Fixed admin expenses Rent 25,000 Advertising 5,000 Office Labor 25,000 Total 55,000 Operating Income 64,000 Please show your Excel calculations
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 134,000 100 % Variable expenses 53,600 40 % Contribution margin 80,400 60 % Fixed expenses 15,000 Net operating income $ 65,400 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 14% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 14% increase in sales.
= Adam's Repair Shop has a monthly target operating income of $12,500. Variable expenses are 75% of sales, and monthly fixed expenses are $9,500. Hint: The contribution margin ratio= 100% - Variable expenses percentage of sales. Read the requirements. Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. = Margin of safety in dollars (Round intermediate calculations up to the nearest whole dollar and your final answer to the nearest whole dollar.) The margin of safety is Requirement 2. Express Adam's margin of safety as a percentage of target sales. Begin by identifying the formula to compute the margin of safety as a percentage of target sales. (Round the percentage to the nearest whole percent.) The margin of safety percentage is % of target sales. Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the…
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 38,700 Net operating income $ 12,900 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 8% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 8% increase in unit sales.
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.
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 86,000 34,400 51,600 39,560 $ 12,040 Required: 1. What is the company's degree of operating leverage? Required 1 Percent of Sales 100% 40% 60% 2. Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 5% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.)
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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.
Suburban Landscape provides landscaping design and installation for residential and commercial properties. The company's recent annual contribution format income statement follows: Amount Percent of Sales Sales 123,000 100 Variable expenses 49,200 40 Contribution margin 73,800 60 % Fixed expenses 24,000 Net operating income 49,800 Required: 1. What is the company's degree of operating leverage? %24
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Amount Sales Sales Variable expenses $ 96,000 100% 38,400 40% Contribution margin 57,600 60% Fixed expenses 44,160 Net operating income. $ 13,440 Required: Assessment Tool iFrame 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.
Requirements: What is the margin of safety as percentage and in unit? Assume that next month management wants the company to earn a profit of $80,000. How many units will have to be sold to meet the target profit?

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