TastyKreme and Krispy Kake are both producers of baked goods, but each has followed a different production strategy. The differences in their strategies resulted in differences in their cost structure, as shown in the following table: TastyKreme 21,000 7 4 $ 31,500 Krispy Kake 16,000 9 Estimated sales in units Unit price Variable cost per unit Total fixed costs Required: 4 $ 48,000 1. Compute the operating income and degree of operating leverage for each company. (Round "Degree of operating leverage" to 1 decimal place.) 2. Assuming sales volume for each company will decline by 10% and that their cost structures will not change, compute the percentage and dollar amount of the change in operating income for each company. (Negative values should be indicated by a minus sign.)

TastyKreme and Krispy Kake are both producers of baked goods, but each has followed a different production strategy. The differences in their strategies resulted in differences in their cost structure, as shown in the following table: TastyKreme 21,000 7 4 $ 31,500 Krispy Kake 16,000 9 Estimated sales in units Unit price Variable cost per unit Total fixed costs Required: 4 $ 48,000 1. Compute the operating income and degree of operating leverage for each company. (Round "Degree of operating leverage" to 1 decimal place.) 2. Assuming sales volume for each company will decline by 10% and that their cost structures will not change, compute the percentage and dollar amount of the change in operating income for each company. (Negative values should be indicated by a minus sign.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

What is a MIS report, why is it prepared?
What is underpricing? Why is it used? What evidence do we have to support the belief that underpricing is a regular problem?
1
Are you concerned about high deficits? Why are why not?
help
why it is not impacted. The above answer shows the reason why it is impacted but the question asked why it is not impacted.
A departure from GAAP could lead to a disclaimer of opinion. * O True False
please help, i couldn't balance the values
do you not see the solution you provided is the exact one i submitted, it says it's wrong..
It says they answers are wrong from your example.