Financial accounting question Phoenix Manufacturing produces 2,500 units of specialty components,selling them at $40 per unit. Their variable costs are 40% of the sellingprice, and total fixed expenses are $35,000. Calculate the degree ofoperating leverage (DOL).

Step 1: Define Degree of Operating Leverage (DOL)The Degree of Operating Leverage (DOL) measures how…

Answered: Phoenix Manufacturing produces 2,500…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter3: Cost-volume-profit Analysis

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Problem 7PA: Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model...

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Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
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I want to this question answer general accounting
What is the degree of operating leaverage?
Denver Enterprises has fixed costs of $3,150,000. It has a unit selling price of $15.50, unit variable cost of $6.80, and a target net income of $850,000. Compute the required sales in units to achieve its target net income. Answer
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Phoenix Manufacturing produces 2,500 units of specialty components, selling them at $40 per unit. Their variable costs are 40% of the selling price, and total fixed expenses are $35,000. Calculate the degree of operating leverage (DOL).