The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 224,000 177.800 46,200 34.500 11,700 Per Unit $ 160 127 $ 33 The company produced and sold 1,400 units during the month and had no beginning or ending inventories, a) What is the current operating leverage? b) Projections indicate that the market will contract by 15% next month. What is the projected net operating income given this increase?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The following monthly data in contribution format are available for the Ross Company and its only product.
Product SD:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Total
$
$
$
$
$
224.000
177.800
46,200
34.500
11,700
Per Unit
$ 160
127
33
$
company produced and sold 1.400 units during the month and had no beginning or ending inventories,
a) What is the current operating leverage?
b) Projections indicate that the market will contract by 15% next month. What is the projected net operating
income given this increase?
Transcribed Image Text:The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 224.000 177.800 46,200 34.500 11,700 Per Unit $ 160 127 33 $ company produced and sold 1.400 units during the month and had no beginning or ending inventories, a) What is the current operating leverage? b) Projections indicate that the market will contract by 15% next month. What is the projected net operating income given this increase?
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