The following CVP income statements are available for Viejo Company and Nuevo Company. Viejo Company Nuevo Company Sales $500,000 $500,000 Variable costs 280,000 180,000 Contribution margin 220,000 320,000 Fixed costs 180,000 280,000 Net income $40,000 $40,000 Compute the degree of operating leverage for each company and interpret results.

The following CVP income statements are available for Viejo Company and Nuevo Company. Viejo Company Nuevo Company Sales $500,000 $500,000 Variable costs 280,000 180,000 Contribution margin 220,000 320,000 Fixed costs 180,000 280,000 Net income $40,000 $40,000 Compute the degree of operating leverage for each company and interpret results.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter19: Variable Costing (varcost)

Section: Chapter Questions

Problem 4R: To determine the effect of different levels of production on the company’s income, move to cell B7...

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The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company, Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 1000 156,000 $100,000 Blossom Co. Degree of Operating Leverage $495,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ 51,000 444,000 344,000 $100,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. Wildhorse Company $ tA $ Blossom Company
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CVP computations. Fill in the blanks for each of the following independent cases.
Subject - account Please help me. Thankyou.
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $374,700 $1,056,000 Variable costs 150,300 633,600 Contribution margin $224,400 $422,400 Fixed costs 158,400 246,400 Income from operations $66,000 $176,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $ % Bryant Inc. $ %
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