Eercise 1 CVP Relationshipshigh electromagnetic radiation environments.Kelter Company manufactures and sells a specialized cordless telephonecontribution format income statement for the most recent year is grvenL ExurcisesCVP RelationshipsThe companysurhelowTotalPer Unit % of SalesSales (20,000 units)Less: Variable expensesContribution marginLess Fixed expensesP1,200,000 P60100%900,000 45P 300,000 15240,000Net operating incomeP 60,000Management is anxious to improve the company's profit performance andhas asked for an analysis of a number of items. Degree of Operating LeverageOperating Leverage =. Sales / Net Operating income= 1200000 / 60000= 20 TimesIncrease in sales by 8%Increase in sales by 8%UnitsPer UnitUnitsValueSales20000601200000216001296000Variable expense45900000972000Contribution15300000324000Less: Fixed Expenses240000240000Net Operating Income6000084000Net Operating Income Shall Increase = Change in sales Changes in Net Operating Income= 9600024000 =4 Times

r high electromagnetic radiation environments. weiter Company manufactures and sells a specialized cordless telephone ntribution format income statement for the most recent year is given The company's low Total Per Unit % of Sales Sales (20,000 units) Less: Variable Contribution margin Less Fixed expenses P1,200,000 P60 100% expenses 900,000 45 P 300,000 15 240,000 P 60,000 Net operating income 22

r high electromagnetic radiation environments. weiter Company manufactures and sells a specialized cordless telephone ntribution format income statement for the most recent year is given The company's low Total Per Unit % of Sales Sales (20,000 units) Less: Variable Contribution margin Less Fixed expenses P1,200,000 P60 100% expenses 900,000 45 P 300,000 15 240,000 P 60,000 Net operating income 22

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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