Find the actual net operating income of this financial accounting question Everest Solutions has the following data:Degree of Operating Leverage = 4Break-even Revenue = $300,000Variable Expense = 40% of SalesFind the Actual Net Operating Income.

Step 1: Contribution margin ratio Basis: Sales so the sales ratio is 100%Contribution margin ratio =…

Answered: Everest Solutions has the following…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 11P

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The following CVP income statements are available for Wildhorse Corp. and Blossom, Inc. Wildhorse Corp. Blossom, Inc. Sales revenue $854,000 $854,000 * Variable costs 396,500 228,750 Contribution margin 457,500 625,250 Fixed costs 305,000 472,750 Net income $152,500 $152,500 (a) Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 15.5.) Degree of Operating Leverage Wildhorse Blossom

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Everest Solutions has the following data: Degree of Operating Leverage = 4 Break-even Revenue = $300,000 Variable Expense = 40% of Sales Find the Actual Net Operating Income.