N. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $8,000 and the total fixed expenses are $10,000. Under this scenario and assuming that total sales remain the same , what is the degree of operating leverage? O. Using the degree of operating leverage that you computed in the previous question , what is the estimated percent increase in net operating income of a 10% increase in sales ? Part 2.Bhiner Company prepared the following contribution format income statement basedon a sales volume of 1,000 units (the relevant range of production is 500 units to1,500 units).Sales$25,000Variable expenses10.000ontribution margin15,000+Fixed expenses8.000Net operating income$ 7.000Required:(Answer each question independently and always refer to the original data unlessinstructed otherwise.) (Show all work/calculations. No credit will be given without

Answered: N. Assume that the amounts of the…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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N. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $8,000 and the total fixed expenses are $10,000. Under this scenario and assuming that total sales remain the same , what is the degree of operating leverage?

O. Using the degree of operating leverage that you computed in the previous question , what is the estimated percent increase in net operating income of a 10% increase in sales ?

Part 2.
Bhiner Company prepared the following contribution format income statement based
on a sales volume of 1,000 units (the relevant range of production is 500 units to
1,500 units).
Sales
$25,000
Variable expenses
10.000
ontribution margin
15,000
+Fixed expenses
8.000
Net operating income
$ 7.000
Required:
(Answer each question independently and always refer to the original data unless
instructed otherwise.) (Show all work/calculations. No credit will be given without

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Degree of Operating Leverage = Contribution margin/ Net Operating Income

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