Compute the company's degree of operating leverage for this financial accounting question Horizon Tech, Inc. reports the contribution margin income statement for2023 as follows:DescriptionSales (12,000 units at $350 each)Amount$4,200,000Variable Costs (12,000 units at $275 each) $3,300,000Contribution MarginFixed CostsPre-tax Income$900,000$600,000$300,000Compute the company's degree of operating leverage (DOL) for 2023.

Step 1: Define Degree of Operating Leverage (DOL)The Degree of Operating Leverage (DOL) is a…

Answered: Horizon Tech, Inc. reports the…

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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In 2023, Dolan Distributors had sales of $914,000, fixed costs of $139,200, variable costs of $514,800, and operating income of $260,000. What is Dolan's contribution margin ratio ? 56.3% 50.5% 27.9% 77.6% 43.7%
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (11,000 units at $300 each) Variable costs (11,000 units at $240 each) Contribution margin $3,300, өөө 2,640,000 2$ 660,000 360,000 Fixed costs Pretax income $300,000 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 5% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020. Complete this question by entering your answers in the tabs below.
The GAAP income statement for Pace Company for the year ended December 31, 2022, shows sales $900,000, cost of goods sold $600,000, and operating expenses $200,000. Assuming all costs and expenses are 70% variable and 30% fixed, prepare a CVP income statement through contribution margin.
1. The following CVP income statements are available for ABC Company and XYZ Company. Sales Variable costs Contribution margin Fixed costs Operating income ABC Company CVP I/S for 2020 $500,000 300,000 200,000 180,000 $ 20,000 XYZ Company CVP I/S for 2020 $500,000 180,000 320,000 300,000 $ 20,000 med m (a) Compute the break-even point in dollars and the margin of safety ratio for each w ww w w w w h m w m ww m company. (b) Compute the degree of operating leverage for each company. (c) Assuming that sales revenue decreases by 20%, each a CVP income statement for w w w w ww w www w w m wm company. (d) Assuming that sales revenue increases by 20%, calculate the operating incomes of the two companies without w w w w ww med m www S WInoul preparing income statement. (Use DOL) nea ww w
1. The following CVP income statements are available for ABC Company and XYZ Company. АВС Companу Sales Variable costs Contribution margin Fixed costs Operating income CVP I/S for 2020 $500,000 300,000 200,000 180,000 $ 20,000 XYZ Company CVP I/S for 2020 $500,000 180,000 320,000 300,000 $ 20,000 (a) Compute the break-even point in dollars and the margin of safety ratio for each company. (b) Compute the degree of operating leverage for each company. (c) Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company- (d) Assuming that sales revenue increases by 20%, calculate the operating incomes of the two companies without preparing income statement. (Use DOL) www www ww www
Calculate the contribution margin of a product for a service company if revenues are $50,000, variable expenses are $30,000, and fixed expenses are $15,000. a.) $ 20,000 b.) $80,000 c.) $35,000 d.) $5,000
1. The following CVP income statements are available for ABC Company and XYZ Company. АВС Сompany XYZ Company CVP I/S for 2020 CVP I/S for 2020 Sales $500,000 300,000 200,000 180,000 $500,000 180,000 320,000 300,000 $ 20,000 Variable costs Contribution margin Fixed costs Operating income $ 20,000 (a) Compute the break-even point in dollars and the margin of safety ratio for each company. (b) Compute the degree of operating leverage for each company. (c) Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (d) Assuming that sales revenue increases by 20%, calculate the operating incomes of the two companies without preparing income statement. (Use DOL)
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,400 units at $280 each) Variable costs (10,400 units at $210 each) Contribution margin $2,912,000 2,184,000 728,000 567,000 $ 161,000 Fixed costS Pretax income 1. Assume Hudson Co. has a target pretax income of $170,000 for 2020. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2020, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)
Jellico Inc.’s projected operating income (based on sales of 450,000 units) for the coming year isas follows:TotalSales $11,700,000Total variable cost 8,190,000Contribution margin $ 3,510,000Total fixed cost 2,254,200Operating income $ 1,255,800Required:1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.2. How many units must be sold to earn operating income of $296,400?3. Compute the additional operating income that Jellico would earn if sales were $50,000 morethan expected.4. For the projected level of sales, compute the margin of safety in units, and then in salesdollars.5. Compute the degree of operating leverage. (Note: Round answer to two decimal places.)6. Compute the new operating income if sales are 10% higher than expected.
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,400 units at $280 each) Variable costs (10,400 units at $210 each) Contribution margin $2,912,000 2,184,000 728,000 567,000 $ 161,000 Fixed costs Pretax income If the company raises its selling price to $300 per unit. 1. Compute Hudson Co.'s contribution margin per unit. 2. Compute Hudson Co.'s contribution margin ratio. 3. Compute Hudson Co.'s break-even point in units. 4. Compute Hudson Co's break-even point in sales dollars. 1. Contribution margin per unit 2. Contribution margin ratio 3. Break-even point units 4. Break-even sales dollars
A company requires $1305600 in sales to meet its operating income target. Its contribution margin is 30%, and fixed costs are $230400. What is the target operating income?
The X Corp income statement resembles the following after 35,000 units were sold in 2020. Sales = $420,000 / $12 per unit Variable = $192,500 / $5.5 per unit Contribution Margin = $227,500 / $6.5 per unit Fixed Expense $110,000 Net Op Income $117,500 A. What is X Corp. breakeven point in units and dollars? B. What is X Corp. margin of safety in %, units, and dollars?

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