Compute the degree of operating leverage for each of the company.

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Answer 1

Question

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

2.

To determine

Compute the percentage increase in profit for both the companies.

3.

To determine

Describe whether the degree of leverage is a measure of risk

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Clorox Company is a leading producer of laundry additives, including Clorox liquid bleach. In the 6 months ended December 31, 2011, net sales of $2,526 million produced net earnings of $235 million. To calculate net earnings, Clorox recorded $89 million in depreciation and amortization. Other items of revenue and expense not requiring cash decreased net earnings by $21 million. Dividends of $159 million were paid during the period. Among the changes in balance sheet accounts during the period were the following ($ in millions), as shown in the table. Accounts receivable Inventories $35 Decrease $65 Increase Accounts payable and accrued liabilities $136 Decrease Income taxes payable $11 Decrease Compute the net cash provided by operating activities using the indirect method.

Compute the total amount of product cost

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Answer 2

Question

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

2.

To determine

Compute the percentage increase in profit for both the companies.

3.

To determine

Describe whether the degree of leverage is a measure of risk

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Answer 3

Question

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

2.

To determine

Compute the percentage increase in profit for both the companies.

3.

To determine

Describe whether the degree of leverage is a measure of risk

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Answer 4

Question

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

2.

To determine

Compute the percentage increase in profit for both the companies.

3.

To determine

Describe whether the degree of leverage is a measure of risk

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Answer 5

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

2.

To determine

Compute the percentage increase in profit for both the companies.

3.

To determine

Describe whether the degree of leverage is a measure of risk

Answer 6

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

Answer 7

Chapter 9, Problem 30E

1.

To determine

Compute the degree of operating leverage for each of the company.

Answer 8

2.

To determine

Compute the percentage increase in profit for both the companies.

Answer 9

2.

To determine

Compute the percentage increase in profit for both the companies.

Answer 10

3.

To determine

Describe whether the degree of leverage is a measure of risk

Answer 11

3.

To determine

Describe whether the degree of leverage is a measure of risk

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 9 - Prob. 1Q Ch. 9 - Prob. 2Q Ch. 9 - What are the basic assumptions of CVP analysis? Ch. 9 - Why do management accountants use sensitivity...Ch. 9 - What type of risk does sensitivity analysis...Ch. 9 - Prob. 6Q Ch. 9 - What is the margin of safety (MOS), and for what...Ch. 9 - Prob. 8Q Ch. 9 - Prob. 9Q Ch. 9 - Prob. 10Q

Compute the degree of operating leverage for each of the company.

Compute the degree of operating leverage for each of the company.

Compute the percentage increase in profit for both the companies.

Describe whether the degree of leverage is a measure of risk

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Chapter 9 Solutions