The company's degree of operating leverage is 1.29.
The degree of operating leverage(DOL) quantifies how much a company's operating income fluctuates in response to a change in sales.
The DOL ratio helps analysts determine the impact of changes in sales on company earnings.
A company with high operating leverage has a high proportion of fixed costs, which means that a large increase in sales can result in large changes in profits.
Using the formula for degree of operating leverage we get:
Degree of Operating Leverage = Contribution Margin/Operating Income
= $85200/$66200
= 1.29
Hence, The company's degree of operating leverage is 1.29.
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Answer:
(a)
Mathematical Equation for break-even
F = QP - QV
Where
F = fixed cost
Q = Break-even quantity
P = Selling price
V = Variable cost
F = Q ( P - V )
Q = F / ( P - V )
Q = $319,800 / ( $650 - $450 )
Q = $319,800 / $200
Q = 1,599 units
(b)
Contribution Margin = Price per unit - Variable cost per unit
Contribution Margin = $650 - $450 = $200
Break-even Point in Units = Fixed Cost / Contribution margin per unit
Break-even Point in Units = $319,800 / $200 = 1,599 units
Explanation:
Mathematical equation use the the break-even equation which represent the behavior of each element towards the break-even point.
Contribution per unit method use the contribution of each unit to calculate the break-even point.
Answer:
An income statement under absorption costing includes all of the following:
Direct materials
Direct labor
Variable overhead
Fixed overhead
Explanation:
The difference between the income statement under the absorption costing system and the income statement under the variable costing system is in how the cost of goods sold and the ending inventory are evaluated. Whereas, absorption costing includes all the costs incurred in determining these costs, variable costing only includes the variable costs in the cost of goods sold and the ending inventory.
Answer: True
Explanation:
The Federal Reserve requires that all banks with National charters become members of the Federal Reserve so that they may have a say in the way the Fed runs its operations. State banks are not required to join but can if they meet some requirements.
The Office of Comptroller of the Currency (OCC) continually supervises and examines national banks to ensure that they are engaged in best practices regarding their operations and treatment of customers.
Answer:
steelersssss all the way babyyyy
Explanation:
