Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Amount Percent of Sales $90,000 100% 42,000 40% Contribution margin 58,000 60% Fixed expenses 48,000 Net operating income $20,000 Compute the company's degree of operating leverage.

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Amount Percent of Sales $90,000 100% 42,000 40% Contribution margin 58,000 60% Fixed expenses 48,000 Net operating income $20,000 Compute the company's degree of operating leverage.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...

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S Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% 60% Sales Variable expenses Contribution margin Amount $ 123,000 49, 200 73,800 Fixed expenses 17,000 Net operating income $ 56,800 Required: 1. What is the company's degree of operating leverage? (Round to two decimal places.) 2. Using the degree of operating leverage, estimate the percentage increase in net operating income if there is a 17% increase in unit sales. (Enter the percentage as a whole number with two decimal places, i.e., 40.25.) 3. Construct a new contribution format income statement for the company assuming a 17% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage
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Can you please answer the general accounting question?
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Amount Sales Sales $ 134,000 53,600 100% Variable expenses 40% Contribution margin 80, 400 60% k Fixed expenses 15,000 Net operating income $65,400 nt Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leveráge, estimate the impact on net operating income of a 12% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 12% increase in sales. ences Complete this question by entering your answers in the tabs below. Required 1 Reqijired 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 12% increase in sales. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Net operating income by %
Subject : - Accounting
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