1. If ABC company achieves its projections, what will be its degree of operating leverage? The following information relates to financial projections of ABC's company:Projected sales60,000 unitsProjected variable costs2.00 per unitProjected fixed costs30,000 per yearProjected unit sales price7.00Tax rate25%

Contribution margin = (sales price - variable costs) x no. of units = (7-2)*60000 = P300000

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 17E

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The following information relates to financial projections of ABC's company: Projected sales 60,000 units Projected variable costs 2.00 per unit Projected fixed costs 30,000 per year Projected unit sales price 7.00 Tax rate 25%