Tanner is CEO of Jones Aerospace. The firm manufactures titanium screws utilized on spacecraft. The firm charges $72.00 per unit for screws that cost the firm $25.20 per unit to manufacture; the firm manufactures 26,400 units. The firm has 927,000 in fixed costs per year. Given this information, calculate the following: D: What is the firm's Breakeven point (in units), given Target Net Income of $420,000? E: What is the firm's Margin of Safety, given its current unit volume? F: What is the firm's Margin of Safety Percentage, given the above information?
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Tanner is CEO of Jones Aerospace. The firm manufactures titanium screws utilized on spacecraft. The firm charges $72.00 per unit for screws that cost the firm $25.20 per unit to manufacture; the firm manufactures 26,400 units. The firm has 927,000 in fixed costs per year. Given this information, calculate the following: |
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D: What is the firm's Breakeven point (in units), given Target Net Income of $420,000? |
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E: What is the firm's Margin of Safety, given its current unit volume? |
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F: What is the firm's Margin of Safety Percentage, given the above information? |
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G: What is the firm's Degree of Operating Leverage (DOL), given the above information? |
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H: If the firm's revenue increases by 22%, what is the predicted percentage change in Net Operating Income, given its DOL? |
INSTRUCTIONS: Write dollar amounts out to the penny, with no dollar sign: 1000.00. All interest rates should be entered as follows: 11.28 (no percent sign). Show Degree of Operating Leverage out to two digits as follows: 5.00
For this problem:
Breakeven (in units), given Target Net Income =
Margin of Safety (in dollars) =
Margin of Safety Percentage =
Degree of Operating Leverage =
Predicted % Change in NOI =
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