Net opreting income to increase? Question:Sales120000 20less variable expenses72000 12contribution margin48000 8less fixed expenses net income 30000net income18000a. What is the company s CM ratio?b. If quarterly sales increase by $4,800 and there is no change in fixedexpenses, by how much would you expect quarterly net operatingincome to increase?

Step 1: Define Operating LeverageThe operating leverage is defined as the ratio of the contribution…

Answered: Question: Sales 120000 20 less variable…

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 3:salalah Company's financial information is given in the table below. Year 2020 Sales (OMR) Fixed Costs 445000 Variable Costs: 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.Р. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
Question 3: Oman Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs 445000 Variable Costs : 2020 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.P. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
How much would you expect quarterly net operating income to increase?
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REQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000
A segment has the following data: Sales $790000 Variable expenses 345000 Fixed expenses 550000 What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to profitable segments? $345000 increase $445000 decrease Cannot be determined from the data provided $5750 decrease
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Solve this financial accounting problem
Assuming costs vary with sales and a 20 percent increase in sales is projected, create the pro forma income statement. Create a pro forma Balance Sheet. All items will vary with sales. What is the plug variable in order for this to balance? Suppose no dividend is planned to be issued next year. What is the plug variable?
Help Sav AVKAOX224 Corp. has provided the following cost, price, and sales data: Per Unit Selling price 240 Variable 54 expenses Contribution $ 186 margin AVKAOX224 is currently selling 8,000 units per month. Fixed expenses are $880,000 per month. (ID#61517) AVKAOX224's marketing manager would like to cut the selling price by $28 and increase advertising spending by $60,000 per month. The marketin- manager predicts that these changes would increase monthly sales quantity by 20%. Q: What would be the overall effect on AVKAOX224's monthly net operating income of this change? (Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income) Multiple Choice
Net operating income to increase?

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