Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. SInformation for two companies follows:SkittlesCompany$ 4,718,0503,278,0502,659,550SalesContribution marginFixed costs(1) Compute the degree of operating leverage (DOL) for each company.(2) Which company is expected to produce a greater percent increase in income from a 30% increase in sales?Complete this question by entering your answers in the tabs below.Required 1 Required 2StarburstCompany$ 4,199,0001,424,000979,000Compute the degree of operating leverage (DOL) for each company.Skittles's DOLStarburst's DOLNumerator:Contribution marginDegree of Operating Leverage113,278,050 /1,424,000 /Denominator:Income=RatioDegree of Operating Leverage▬▬▬O0

Lets understand the basics.Degree of operating leverage indicate how much net operating income will…

Answered: Information for two companies follows:…

Information for two companies follows: Sales Contribution margin Fixed costs Skittles Company $ 4,718,050 3,278,050 2.659.550 Starburst Company $ 4,199,000 1,424,000 979.000

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Note:-

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Answer completely.
You will get up vote for sure.

S
Information for two companies follows:
Skittles
Company
$ 4,718,050
3,278,050
2,659,550
Sales
Contribution margin
Fixed costs
(1) Compute the degree of operating leverage (DOL) for each company.
(2) Which company is expected to produce a greater percent increase in income from a 30% increase in sales?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Starburst
Company
$ 4,199,000
1,424,000
979,000
Compute the degree of operating leverage (DOL) for each company.
Skittles's DOL
Starburst's DOL
Numerator:
Contribution margin
Degree of Operating Leverage
1
1
3,278,050 /
1,424,000 /
Denominator:
Income
=
Ratio
Degree of Operating Leverage
▬▬▬
O
0

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