Urban Styles is a retail store selling men's apparel. The variable cost per shirt is $25, and the sales price is $45 per shirt. Urban Syles expects to sell 500,000 shirts this year, which would generate a before-tax profit of $4,000,000. Additionally, the company received a $20,000 grant from the city to renovate its building. DOL? Nova Tech's partial income statement is provided as follows: Sales: $1,000,000 Less: Variable costs: $500,000 Contribution Margin: $500,000 Less: Fixed costs: $250,000 One-Time Charity Donation: $100,000 Net Operating Income: $250,000 Requirement: What is Nova Tech's degree of operating leverage? Options: 8.25 9.50 5.00 6.50
Urban Styles is a retail store selling men's apparel. The variable cost per shirt is $25, and the sales price is $45 per shirt. Urban Syles expects to sell 500,000 shirts this year, which would generate a before-tax profit of $4,000,000. Additionally, the company received a $20,000 grant from the city to renovate its building. DOL? Nova Tech's partial income statement is provided as follows: Sales: $1,000,000 Less: Variable costs: $500,000 Contribution Margin: $500,000 Less: Fixed costs: $250,000 One-Time Charity Donation: $100,000 Net Operating Income: $250,000 Requirement: What is Nova Tech's degree of operating leverage? Options: 8.25 9.50 5.00 6.50
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 39P
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![Urban Styles is a retail store selling men's apparel. The variable cost per shirt is $25, and the sales price
is $45 per shirt. Urban Syles expects to sell 500,000 shirts this year, which would generate a before-tax
profit of $4,000,000. Additionally, the company received a $20,000 grant from the city to renovate its
building. DOL? Nova Tech's partial income statement is provided as follows: Sales: $1,000,000
Less: Variable costs: $500,000 Contribution Margin: $500,000 Less: Fixed costs: $250,000 One-Time
Charity Donation: $100,000 Net Operating Income: $250,000
Requirement: What is Nova Tech's degree of operating leverage?
Options:
8.25
9.50
5.00
6.50](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F83795adb-083a-47d9-b5a0-cf416e5c7aed%2F31bc6d6a-1197-4188-abf5-5574cc1c8e4d%2Fhsjcqxs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Urban Styles is a retail store selling men's apparel. The variable cost per shirt is $25, and the sales price
is $45 per shirt. Urban Syles expects to sell 500,000 shirts this year, which would generate a before-tax
profit of $4,000,000. Additionally, the company received a $20,000 grant from the city to renovate its
building. DOL? Nova Tech's partial income statement is provided as follows: Sales: $1,000,000
Less: Variable costs: $500,000 Contribution Margin: $500,000 Less: Fixed costs: $250,000 One-Time
Charity Donation: $100,000 Net Operating Income: $250,000
Requirement: What is Nova Tech's degree of operating leverage?
Options:
8.25
9.50
5.00
6.50
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