Using the degree of operating leverage, what is the estimated percentage increase in net operating income of a 7% increase in sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Summit Manufacturing prepared the following contribution format income statement based on a sales volume of 2,000 units (the relevant range of production is 1,200 units to 2,800 units): Amount $80,000 Sales Variable expenses $48,000 Contribution margin $32,000 Fixed expenses $20,000 Net operating income $12,000
Using the degree of operating leverage, what is the estimated percentage increase in net operating income of a 7% increase in sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Summit Manufacturing prepared the following contribution format income statement based on a sales volume of 2,000 units (the relevant range of production is 1,200 units to 2,800 units): Amount $80,000 Sales Variable expenses $48,000 Contribution margin $32,000 Fixed expenses $20,000 Net operating income $12,000
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 16E
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Transcribed Image Text:Using the degree of operating leverage, what is the estimated percentage increase in net operating
income of a 7% increase in sales? (Do not round intermediate calculations. Round your answer to
2 decimal places.)
Summit Manufacturing prepared the following contribution format income statement based on a
sales volume of 2,000 units (the relevant range of production is 1,200 units to 2,800 units):
Amount
$80,000
Sales
Variable expenses
$48,000
Contribution margin $32,000
Fixed expenses
$20,000
Net operating income $12,000
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