Please provide correct answer accounting question If pretax profits decrease by 13.8% when the DOL is 3.8, then thedecrease in sales is:a. 2.75%b. 0.28%c. 3.63%d. 10%

Step 1: Define Operating LeverageThere are various methods to calculate the degree of operating…

Answered: If pretax profits decrease by 13.8%…

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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REQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000
Which will create the most favorable effect in gross profit? A. 10% increase in selling price B. 10% decrease in cost price C. 10% increase in both selling price and cost price D. 20% decrease in selling and administrative expenses
Suppose Micro-Shave growth rate in sales is forecast as 13% rather than 10%. If all ratios stay the same, what is the AFN? Sales growth rate So Ao / So Lo / So Profit margin (M) Payout ratio O $ 170.74 O $240.50 O $ 205.62 O None of these are correct 13% $3,000 million 66.666% 6.667% 3.783% 50.670%
If Sales are $2,000,000 and the Break Even point is $1,500,000. What is the Margin of Safety (ratio)? A. 33% B. 175% C. 25% D. 75%
5. Expected Value SDA Company prepared the following probability distribution describing the relative likelihood of monthly sales volume levels and related profit (loss) for its lone product that sells for P 50 per unit: Sales volume Probability Profit (Loss) 10% (P 70,000) 20% 10,000 40% 60,000 20% 100,000 10% 140,000 5,000 12,000 18,000 24,000 30,000 REQUIRED: Using the expected value approach, A) How much is the budgeted sales for the month? B) What is the expected value of the monthly profit?
Margin of Safety a. If Canace Company, with a break-even point at $401,800 of sales, has actual sales of $490,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $___________ 2. ____________% b. If the margin of safety for Canace Company was 45%, fixed costs were $1,648,350, and variable costs were 55% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$___________
Given a profit margin = 15%, ROE = 25%, D/E = 1.25, and assets = $600, please calculate sales.
Sales for Green Inc. are expected to change by 16%. If Green's degree of operating leverage is 2.20, how much is Green's operating income expected to change? A В D E 1 2 3 Green's operating income is expected to change by: 4 6 7 8 9 10
O e. operating income will decrease. XYZ Co. has a contribution margin of $450,000 and profit of $150,000. If sales increase 5%, by how much will profits increase? O a. 15% O b. 90% 30% O d. 60% O e. None of the given answer is correct. NEXT PAGE AGE Po
If a company’s variable costs are 70% of sales, which formula represents the computation of peso sales that will yield a profit equal to 10% of the amount of sales when P equals sales in pesos for the period and FC equals total fixed costs for the period? a. P = .2/FC b. P = FC/.2 c. P = .27/FC d. P = FC/.27
Kindly help me Accounting question
1.) what is the break-even in dollar sales? 2.) what is the margin of safety percentage? 3.) what is the degree of operating leverage ? (Round your answer to 2 decimal places.) 4.) using the degree of operating leverage and without changing anything, calculate the percentage change in net operating income if unit sales increase by 20% ?

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If pretax profits decrease by 13.8% when the DOL is 3.8, then the decrease in sales is: a. 2.75% b. 0.28% c. 3.63% d. 10%