Hudson Co. reports the contribution margin income statement for 2017. Sales (10,400 units at $300 each) $3,120,000 Variable costs (10,400 units at $240 each) $2,496,000 Contribution margin Fixed costs Pre-tax income $624,000 $468,000 $156,000 1. Compute the company's degree of operating leverage for 2017. 2. If sales decrease by 5% in 2018, what will be the company's pretax income?

Hudson Co. reports the contribution margin income statement for 2017. Sales (10,400 units at $300 each) $3,120,000 Variable costs (10,400 units at $240 each) $2,496,000 Contribution margin Fixed costs Pre-tax income $624,000 $468,000 $156,000 1. Compute the company's degree of operating leverage for 2017. 2. If sales decrease by 5% in 2018, what will be the company's pretax income?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20MC: Wallace Industries has total contribution margin of $58,560 and net income of $24,400 for the month...

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Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of income will Singh Co. expect?