Larger Company had originally expected to earn operating income of Php130,000 in the coming year. Its degree of operating leverage is 2.4. Recently, larger revised its plan and now expects to increase sales by 20% next year. What is the percentage change in operating income for the coming year? a. 8.33% b. 48.00% c. 20.00% d. 54.17%

Larger Company had originally expected to earn operating income of Php130,000 in the coming year. Its degree of operating leverage is 2.4. Recently, larger revised its plan and now expects to increase sales by 20% next year. What is the percentage change in operating income for the coming year? a. 8.33% b. 48.00% c. 20.00% d. 54.17%

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter22: Master Budget (master)

Section: Chapter Questions

Problem 5R: Suppose the company has just the opposite news and now expects unit sales for August, September, and...

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Question

Larger Company had originally expected to earn operating income of
Php130,000 in the coming year. Its degree of operating leverage is 2.4.
Recently, larger revised its plan and now expects to increase sales by 20%
next year. What is the percentage change in operating income for the
coming year?

a. 8.33%
b. 48.00%
c. 20.00%
d. 54.17%

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