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The CVP income statements shown below are available for Armstrong Company and Contador Comp Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. Armstrong $499,000 242,000 257,000 157,000 $100,000 Contador Co. $499,000 Degree of Operating Leverage 46,000 453,000 353,000 a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e $100,000

The CVP income statements shown below are available for Armstrong Company and Contador Comp Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. Armstrong $499,000 242,000 257,000 157,000 $100,000 Contador Co. $499,000 Degree of Operating Leverage 46,000 453,000 353,000 a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e $100,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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please solve for A1 and B
### CVP Income Statements for Armstrong Company and Contador Company #### Armstrong Co. - **Sales:** $499,000 - **Variable Costs:** $242,000 - **Contribution Margin:** $257,000 - **Fixed Costs:** $157,000 - **Net Income:** $100,000 #### Contador Co. - **Sales:** $499,000 - **Variable Costs:** $46,000 - **Contribution Margin:** $453,000 - **Fixed Costs:** $353,000 - **Net Income:** $100,000 --- ### (a1) Compute the Degree of Operating Leverage for Each Company *Round answers to 2 decimal places, e.g., 1.15.* #### Degree of Operating Leverage - **Armstrong:** - **Contador:** *(Note: The table for entering the degree of operating leverage for each company is provided here, but with no values filled in.)*
Transcribed Image Text:### CVP Income Statements for Armstrong Company and Contador Company #### Armstrong Co. - **Sales:** $499,000 - **Variable Costs:** $242,000 - **Contribution Margin:** $257,000 - **Fixed Costs:** $157,000 - **Net Income:** $100,000 #### Contador Co. - **Sales:** $499,000 - **Variable Costs:** $46,000 - **Contribution Margin:** $453,000 - **Fixed Costs:** $353,000 - **Net Income:** $100,000 --- ### (a1) Compute the Degree of Operating Leverage for Each Company *Round answers to 2 decimal places, e.g., 1.15.* #### Degree of Operating Leverage - **Armstrong:** - **Contador:** *(Note: The table for entering the degree of operating leverage for each company is provided here, but with no values filled in.)*
**Instructions for Preparing Variable Costing Income Statement** **Task:** Assume that sales revenue increases by 10%. Prepare a variable costing income statement for each company listed below. **Company Names:** - Armstrong Company - Contador Company **Income Statement Format:** Both companies have the same format with fields to fill out: 1. **Dropdown fields**: These are likely for selecting specific cost categories (e.g., Sales, Variable Costs, Contribution Margin, etc.). 2. **Dollar Amount Fields**: Empty fields next to each dropdown to input the corresponding dollar amounts for each category. 3. **Multiple lines**: Several rows are available to include different categories and calculations. 4. **Final Total**: At the bottom, there is an additional space for calculating the total, which will indicate the overall net income or loss. **Objective:** Complete the table by selecting relevant cost categories from the dropdown menus and entering the corresponding financial data in dollar amounts. This will help in comparing the financial changes for both Armstrong and Contador Companies after an increase in sales revenue.
Transcribed Image Text:**Instructions for Preparing Variable Costing Income Statement** **Task:** Assume that sales revenue increases by 10%. Prepare a variable costing income statement for each company listed below. **Company Names:** - Armstrong Company - Contador Company **Income Statement Format:** Both companies have the same format with fields to fill out: 1. **Dropdown fields**: These are likely for selecting specific cost categories (e.g., Sales, Variable Costs, Contribution Margin, etc.). 2. **Dollar Amount Fields**: Empty fields next to each dropdown to input the corresponding dollar amounts for each category. 3. **Multiple lines**: Several rows are available to include different categories and calculations. 4. **Final Total**: At the bottom, there is an additional space for calculating the total, which will indicate the overall net income or loss. **Objective:** Complete the table by selecting relevant cost categories from the dropdown menus and entering the corresponding financial data in dollar amounts. This will help in comparing the financial changes for both Armstrong and Contador Companies after an increase in sales revenue.
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