Q-859 Burger Queen Restaurant had the following information available related to its operations from last year: Sales (150,000 units) 500,000 Variable Costs 200,000 Contributed margin 300,000 Fixed Costs Net Profit 150,000 150,000 a) What is Burger Queen's operating leverage? b) If sales increased by 30 percent, what would Burger Queen's net profit be? Question: 515 Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $138,000 100% Variable expenses 55,200 40% Contribution margin 82,800 60% 18,000 Fixed expenses Net operating income $64,800 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 17% increase in sales.
Q-859 Burger Queen Restaurant had the following information available related to its operations from last year: Sales (150,000 units) 500,000 Variable Costs 200,000 Contributed margin 300,000 Fixed Costs Net Profit 150,000 150,000 a) What is Burger Queen's operating leverage? b) If sales increased by 30 percent, what would Burger Queen's net profit be? Question: 515 Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $138,000 100% Variable expenses 55,200 40% Contribution margin 82,800 60% 18,000 Fixed expenses Net operating income $64,800 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 17% increase in sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Q-859
Burger Queen Restaurant had the following information available related to its operations
from last year:
Sales (150,000 units) 500,000
Variable Costs
200,000
Contributed margin 300,000
Fixed Costs
Net Profit
150,000
150,000
a) What is Burger Queen's operating leverage?
b) If sales increased by 30 percent, what would Burger Queen's net profit be?
Question: 515
Engberg Company installs lawn sod in home yards. The company's most recent monthly
contribution format income statement follows:
Amount Percent of Sales
Sales
$138,000 100%
Variable expenses
55,200 40%
Contribution margin 82,800
60%
18,000
Fixed expenses
Net operating income $64,800
1. What is the company's degree of operating leverage?
2. Using the degree of operating leverage, estimate the impact on net operating income of a
17% increase in sales.
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