Gandee Company has an operating leverage factor of 5. Which of the following statements is true? should result in a 40% change in The respective amounts that change are: Thus, an 8% change in An 8% change in fixed costs should result in a 40% change in income. An 8% change in variable costs should result in a 40% change in contribution margin. An 8% change in income should result in a 40% change in sales revenue. An 8% change in sales revenue should result in a 40% change in income. An 8% change in variable costs should result in a 40% change in break-even sales.

Gandee Company has an operating leverage factor of 5. Which of the following statements is true? should result in a 40% change in The respective amounts that change are: Thus, an 8% change in An 8% change in fixed costs should result in a 40% change in income. An 8% change in variable costs should result in a 40% change in contribution margin. An 8% change in income should result in a 40% change in sales revenue. An 8% change in sales revenue should result in a 40% change in income. An 8% change in variable costs should result in a 40% change in break-even sales.

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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Ulpik Inc. has variable operation costs of $10 per unit, a selling price of $75,50 per unit and fixed operating costs of $250,000. a) Calculate the operating breakeven point in units. b) Calculate the firm's EBIT at a level of units sold of 24,000; 28,000; and 30,000 units respectively. c) With 28,000 units as a base, what are the percentage changes in units sold and EBIT, as sales move from the base to the other levels used in part b)? d) Use the percentages computed in part c) to determine the degree of operating leverage (DOL).
Which of the following would produce no change in the contribution margin per unit? Select one: a. A 14% increase in variable cost. b.A 7% increase in selling price. CA 15% decrease in selling price. d. None of the given of answers. A 23% increase in the number of units sold.
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For the past 8 months, Mojo Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to costs if the level of activity at Mojo is O A. variable, decreasing O B. variable, increasing O C. fixed, increasing O D. fixed, decreasing
Solve this question with steps. The subject is Managerial Accounting.
H1.
AutoSave OFF 096DCEP… CB Draw Page Layout Home Insert X [ ✓ Paste B35 A Arial A 1 Chapter 5: Applying Excel 2 3 Data 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses BIU - fx =B31/833 49 50 30 Variable expenses varable 31 Contribution margin 32 Fixed expenses 33 Net operating income 11 12 Compute the CM ratio and variable expense ratio 13 Selling price per unit 14 Variable expenses per unit 15 Contribution margin per unit 16 17 CM ratio 18 Variable expense ratio 19 20 Compute the break-even point 21 Break-even in unit sales 22 Break-even in dollar sales 23 24 Compute the margin of safety 25 Margin of safety in dollars 26 Margin of safety percentage 27 28 Compute the degree of operating leverage 29 Sales 34 35 Degree of operating leverage 36 37 38 39 40 41 42 43 44 45 46 47 48 Ready T 8 9 Enter a formula into each of the cells marked with a ? below 10 Review Problem: CVP Relationships Chapter 5 Form V esc ✓ 10 1 + LO Accessibility: Good to go @ 2…
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase