Explanation Firstly, the degree of operating leverage is ascertained by dividing the contribution margin with net operating income of the company which gives an operating leverage of 4. Then a different method of degree of operating leverage is applied to calculate the percent change in net operating income. Percentage change in net operating income is ascertained by percent change in net operating income (?) divided by percent change in sales (5%). Since we already have the value for operating leverage (4), the missing percent change in net operating income is ascertained by multiplying the percent change in sales with the value of operating leverage. C o m p u t a t i o n o f P e r c e n t i n c r e a s e i n n e t o p e r a t i n g i n c o m e D e g r e e o f O p e r a t i n g L e v e r a g e = % c h a n g e i n n e t o p e r a t i n g i n c o m e % c h a n g e i n s a l e s 4 = % c h a n g e i n n e t o p e r a t i n g i n c o m e 0.05 % C h a n g e i n N e t O p e r a t i n g i n c o m e = 4 * 0

15th Edition

ISBN: 9781259405303

Author: Garrison

Publisher: MCG

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Question

Chapter 5, Problem 13F15

To determine

The estimated percent increase in net operating income

Expert Solution & Answer

Chapter 5 Solutions

MANAGERIAL ACCT W/CONNECT >IC<

Ch. 5 - Prob. 1Q Ch. 5 - Often the most direct route to a business decision...Ch. 5 - Prob. 3Q Ch. 5 - What is the meaning of operating leverage?Ch. 5 - What is the meaning of break-even point?Ch. 5 - 5-6 In response to a request from your immediate...Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 1AE

Ch. 5 - Prob. 2AE Ch. 5 - Prob. 3AE Ch. 5 - Prob. 4AE Ch. 5 - Prob. 5AE Ch. 5 - Prob. 1F15 Ch. 5 - Prob. 2F15 Ch. 5 - Prob. 3F15 Ch. 5 - Prob. 4F15 Ch. 5 - Prob. 5F15 Ch. 5 - Prob. 6F15 Ch. 5 - Prob. 7F15 Ch. 5 - Prob. 8F15 Ch. 5 - Prob. 9F15 Ch. 5 - Prob. 10F15 Ch. 5 - Prob. 11F15 Ch. 5 - Prob. 12F15 Ch. 5 - Prob. 13F15 Ch. 5 - Prob. 14F15 Ch. 5 - Prob. 15F15 Ch. 5 - Prob. 1E Ch. 5 - Prob. 2E Ch. 5 - Prob. 3E Ch. 5 - Prob. 4E Ch. 5 - Prob. 5E Ch. 5 - Prob. 6E Ch. 5 - Prob. 7E Ch. 5 - Prob. 8E Ch. 5 - Prob. 9E Ch. 5 - EXERCISE 5-10 Multiproduct Break-Even Analysis...Ch. 5 - Prob. 11E Ch. 5 - EXERCISE 5-12 Multiproduct Break-Even Analysis...Ch. 5 - EXERCISE 5-13 Changes in Selling Price, Sales...Ch. 5 - Prob. 14E Ch. 5 - Prob. 15E Ch. 5 - Prob. 16E Ch. 5 - Prob. 17E Ch. 5 - Prob. 18E Ch. 5 - Prob. 19P Ch. 5 - PROBLEM 5-20 CVP Applications: Break-Even...Ch. 5 - PROBLEM 5-21 Sales Mix; Multiproduct Break-Even...Ch. 5 - Prob. 22P Ch. 5 - Prob. 23P Ch. 5 - Prob. 24P Ch. 5 - PROBLEM 5-25 Changes in Fixed and Variable Costs;...Ch. 5 - PROBLEM 5-26 CVP Applications; Break-Even...Ch. 5 - Prob. 27P Ch. 5 - Prob. 28P Ch. 5 - Prob. 29P Ch. 5 - Prob. 30P Ch. 5 - PROBLEM 5-31 Interpretive Questions on the CVP...Ch. 5 - CASE 5-32 Break-Even Analysis for Individual...Ch. 5 - Prob. 33C

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