Operating leverageAsha Inc. and Samir Inc. have the following operating data:SalesVariable costsContribution marginFixed costsAsha Inc.Asha Inc.Samir Inc.$265,500(106,500)$159,000(106,000)$53,000$$Operating incomea. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place.Asha Inc.Samir Inc.Samir Inc.b. How much would operating income increase for each company if the sales of each increased by 10% ? If required, round answers to nearest whole number.DollarsPercentage$781,000(468,600)$312,400(170,400)$142,000c. The difference in thecontribution margin than are Samir Inc.'s.%%of operating income is due to the difference in the operating leverages. Asha Inc.'soperating leverage means that its fixed costs are apercentage of

a. Operating leverageAsha Inc.3.0Samir Inc.2.2 b. Operating Income increase (dollars &…

Answered: Operating leverage Asha Inc. and Samir…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Understanding CVP relationships Calculate the missing amounts for each of thefollowing firms:Units Selling Variable Costs Contribution Fixed OperatingSold Price per Unit Margin Costs Income (Loss)Firm A 11,200 $24.00 ? $100,800 $41,300 ?Firm B 8,400 ? $18.20 ? 64,500 $32,940Firm C ? 7.30 4.20 10,850 ? (6,750)Firm D 4,720 ? 51.25 41,064 48,210 ?
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $275,600 $882,000 Variable costs 110,600 529,200 Contribution margin $165,000 $352,800 Fixed costs 110,000 205,800 Income from operations $55,000 $147,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Вeck Inc. Bryant Inc. 2.4 b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Вeck Inc. $ 33,000 60 V % Bryant Inc. 70,560 57 X % c. The difference in the increases of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher v operating leverage means that its fixed costs are a larger percentage of contribution margin than are Bryant Inc.'s.
Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses. Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Assume that the variable costs as a percent of sales for each segment are as follows: Turner Home Box Office Warner Bros. Revenues Time Warner, Inc. Segment Revenues (in millions) 38% 30% a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to whole percents for each segment from the information given. Variable costs Contribution margin $90,000 93,000 27,000 A 28% Turner Home Box Office Warner Bros. LA 000
genow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Lo... r Operating Leverage Teague Co. reports the following data: Sales Variable costs Contribution margin Fixed costs $480,000 264,000 $216,000 175,200 $40,800 Income from operations Determine Teague Co.'s operating leverage. Round your answer to one decimal place.
Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses. Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Turner Home Box Office Warner Bros. Time Warner, Inc. Segment Revenues (in millions) Assume that the variable costs as a percent of sales for each segment are as follows: Revenues Variable costs $94,300 79,200 29,300 a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to whole percents for each segment from the information given. Contribution margin Contribution margin ratio (as a percent) 40% 51% 37% Turner % Home Box Offic b. Does your answer to (a)…
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Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $374,700 $1,056,000 Variable costs 150,300 633,600 Contribution margin $224,400 $422,400 Fixed costs 158,400 246,400 Income from operations $66,000 $176,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ %
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Consider the following summary modified income statement for Tech Inc.: Sales $593,000 Variable Operating Costs 252,000 Contribution Margin $341,000 Fixed Operating Costs 121,000 Operating Income $220,000 Interest Expense 26,000 Net Income $194,000 Calculate Tech's degree of operating leverage. A В C E 1 2 Degree of Operating Leverage = 4 5 7 8 9 10 3. 6.
Based on the income statements shown below, which division has the cost structure with the highest operating leverage? Soft Drinks $ 64,000 Bottled Water Fruit Juices $ 64,000 $ 64,000 (16,000) (8,000) (36,000) 一開 48,000 28,000 (10,080) $ 17,920 Revenue Variable costs Contribution margin Fixed costs Net income Multiple Choice Bottled Water. Fruit Juices. Soft Drinks. (37,920) $ 10,080 The three divisions have identical operating leverage. 56,000 (47,920) $ 8,080
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