U.S. Steal has the following income statement data:TotalOperatingUnitsSold80,000VariableFixedTotalTotalIncome(Loss)$ 170,000230,000CostsCostsCostsRevenue$ 160,000$ 70,000$ 230,000$ 400, 000500,000100,000200,00070,000270,000The top row of the table has the beginning values and the bottom row of the table has the ending values.a. Compute the degree of operating leverage (DOL) based on the formula below. (Do not round intermediate calculations. Roundyour final answer to 2 decimal places.)Percent change in operating incomeDOLPercent change in units soldDegree of operating leverage1.41b. Recompute DOL using the formula given below. There may be a slight difference due to rounding. (Do not round intermediatecalculations. Round your final answer to 2 decimal places.)O(P - vc)Q(P - VC) - FCDOLQ represents beginning units sold (all calculations should be done at this level).P can be found by dividing total revenue by units sold.VC can be found by dividing total variable costs by units sold.Degree of operating leverage

Units sold change from 80000 to 100000 and operating income changes from $170000 to $230000. We need…

Answered: U.S. Steal has the following income…

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

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

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. $ %
Concord Company earned a controllable margin of $125000 on sales of $1607000. The division had average operating assets of $1293000. The company requires a return on investment of at least 7%. How much is residual income? O $34490 O $159490 O $90510 O $112490
= Required Supply the missing information in the following table for Zachary Company: Note: Do not round intermediate calculations. Round "ROI" answer to 2 decimal places. (i.e., 0.2345 shoule Sales ROI Operating assets Operating income Turnover Residual income Operating profit margin Desired rate of return $ 309,600 1.8 % 13 % 19%
Oriole Corp. had total variable costs of $151,250, total fixed costs of $130,500, and total revenues of $275,000. (a1) X Your answer is incorrect. Calculate contribution margin ratio. Contribution margin ratio 81.8 do %
A1 please help.....
Sales 560,053 Variable expenses, 334,667 Fixed expenses 48,673 Compute the degree of operating leverage rounded to two decimal places. Enter only the amount for the degree of operating leverage rounded to two decimal places based on general rounding rules In the box provided below. Enter the amount only. Do not enter letters, words, or the calculation.
Shirley Incorporated has three divisions, King, West and Gold. All common fixed costs are unavoidable. Following is the segmented income statement for the previous year: Sales revenue Variable costs Contribution margin Direct fixed costs Segment margin Common fixed costs (allocated) Net operating income (loss) King $ 1,040,000 312,000 $ 728,000 104,000 $ 624,000 391,000 $ 233,000 Required: a. What would Shirley's net income (loss) be if the West Division were dropped? b. What would Shirley's net income (loss) be if the Gold Division were dropped? Complete this question by entering your answers in the tabs below. Required A Required B What would Shirley's net income (loss) be if the West Division were dropped? Gold $426,000 251,340 $ 174,660 48.000 $ 126,660 159,375 $ (32,715) Total $ 2,048,000 889,260 $ 1,158,740 192,000 $ 966,740 763,000 $ 203,740
Consider the following summary modified income statement for Tech Inc.: Sales $593,000 Variable Operating Costs 252,000 Contribution Margin $341,000 Fixed Operating Costs 121,000 Operating Income $220,000 Interest Expense 26,000 Net Income $194,000 Calculate Tech's degree of operating leverage. A В C E 1 2 Degree of Operating Leverage = 4 5 7 8 9 10 3. 6.
The following data show the total output for a firm when different amounts of labour are combined with a fixed amount of capital. Assume the wage per unit of labour is $10 and the cost of the capital is $50. Total output per Labour per period period 1 10 2 30 3 90 4 132 150 If this firm is producing 20 units of output per period its marginal cost i... O a. $1.00. O b. $0.17. O c. $0.50. O d. $1.67. O e. $10.00.
Ram Company has three geographic segments: New York, New Jersey, and Connecticut. Its segmented income statement for last year is shown below: Company New York New Jersey Connecticut Sales 800,000 350,000 250,000 200,000 Variable costs 440,000 140,000 120,000 CM Traceable Fixed Costs 90,000 65,000 50,000 Segment margin Common Fixed Costs Net operating income 1. What was the amount of segment margin for New York? a)$60,000 b)$70,000 c)$80,000 d)$50,000 2. If Ram Company’s total fixed costs were $305,000, how much were the company’s common fixed costs? a)$110,000 b)$80,000 c)$100,000 d)$90,000
The Tom Company reports the following data. Sales $181,203 Variable costs 94,503 Fixed costs 35,700 Determine Tom Company's operating leverage. Round your answer to one decimal place.

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS