Question 2: Harry Company manufactures and sells steel chairs. The company’s contribution format income statement for the most recent year is given below: Sales (9,000 units) $162,000 Variable expense 90,000 Contribution margin 72,000 Fixed expense 40,000 Net operating profit 32,000 Requirement Calculate the variable ratio Compute the company’s degree of operating leverage at the present level of How many units must be sold to achieve a target profit of $8,000 and interpret your What is the revised net operating income if variable expense decreased by $2 per unit and the number of units sold increased by 20%?
Question 2: Harry Company manufactures and sells steel chairs. The company’s contribution format income statement for the most recent year is given below: Sales (9,000 units) $162,000 Variable expense 90,000 Contribution margin 72,000 Fixed expense 40,000 Net operating profit 32,000 Requirement Calculate the variable ratio Compute the company’s degree of operating leverage at the present level of How many units must be sold to achieve a target profit of $8,000 and interpret your What is the revised net operating income if variable expense decreased by $2 per unit and the number of units sold increased by 20%?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2: Harry Company manufactures and sells steel chairs. The company’s contribution format income statement for the most recent year is given below:
|
Sales (9,000 units) |
$162,000 |
|
Variable expense |
90,000 |
|
Contribution margin |
72,000 |
|
Fixed expense |
40,000 |
|
Net operating profit |
32,000 |
Requirement
- Calculate the variable ratio
- Compute the company’s degree of operating leverage at the present level of
- How many units must be sold to achieve a target profit of $8,000 and interpret your
- What is the revised net operating income if variable expense decreased by $2 per unit and the number of units sold increased by 20%?
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