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Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ $ S 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?

Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ $ S 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ 5 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?
Transcribed Image Text:Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ 5 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?
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