Jordan's Bakery has a monthly target operating income of $8,000. Variable expenses are 45% of sales, and monthly fixed expenses are $5,500. What is Jordan's operating leverage factor at the target level of operating income?
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Jordan's Bakery has a monthly target operating income of $8,000. Variable expenses are 45% of sales, and monthly fixed expenses are $5,500. What is Jordan's operating leverage factor at the target level of operating income?
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- Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?Neeley Grocery has a monthly target operating income of $25,000. Variabe expenses are 20% of sales and monthly fixed expenses are $15,000. What is Neeley Grocery's operating leverage factor at the target level of operating income?Alina’s Catering has a monthly target operating income of $16,000. Variable expenses are 40% of sales and monthly fixed expenses are $14,000. What is Alina’s operating leverage factor at the target level of operating income?
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- Western Repair Shop has a monthly target operating income of $50,000. Variable expenses are 55% of sales and monthly fixed expenses are $9,600. Requirements 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. 2. Express Western Repair Shop's margin of safety as a percentage of target sales. 3. What is Western Repair Shop's operating leverage factor at the target level of operating income? 4. Assume that the repair shop reaches its target. By what percentage will Western Repair Shop's operating income fall if sales volume declines by 16%? Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. Target sales in dollars Margin of safety in dollars The margin of safety is $. (Round interim calculations up to the nearest whole dollar and your final answer up to the nearest whole dollar.) Break-even sales in dollars =What is the degree of operating leverage for this accounting question?Light Me Up Lamps has variable expenses of 30% of sales and monthly fixed expenses of $140,000. The monthly target operating income is $80,000. What is Light Me Up Lamps' operating leverage factor at the target level of operating income?
- What are the variable expenses per unit on these financial accounting question?Kreter, Inc. earned net income of $300,000 last year. This year it wants to earn net income of $450,000. The company's fixed costs are expected to be $300,000, and variable costs are expected to be 70% of sales. Determine the required sales to meet the target net income of $450,000 using the mathematical equation. Required sales $ Using a CVP income statement format, prove your answer. Fixed costsTarget net income / (Loss)SalesVariable costsContribution margin $ Contribution marginFixed costsTarget net income / (Loss)SalesVariable costs Contribution marginSalesVariable costsFixed costsTarget net income / (Loss) Fixed costsVariable costsSalesTarget net income / (Loss)Contribution margin SalesFixed costsContribution marginVariable costsTarget net income / (Loss) $Jasmine Inc. makes a single product that it sells for $25 each. Variable costs are $13 per unit and annual fixed costs total $30,000 per year. The company would like to realize operating income next year of $60,000. What level of sales in dollars must the company achieve to reach its target profit?
