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1 year ago

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows.

1 answer:

4 0

Using the degree of operating leverage, the estimated impact on net operating income of a 5 % increase in sales is 6.45%.

The degree of operating leverage (DOL) measures how much a company's operating income varies in response to sales fluctuations.

The DOL ratio assists analysts in determining how changes in sales affect company earnings.

Because a company with high operating leverage has a high proportion of fixed costs, a significant increase in sales can result in significant changes in profits.

If sales increase by 5%, the calculation for increased Net Operating Income is as follows:

Increase in Net Operating Income = Sales Increase x Degree of Operating Leverage

= 5% x 1.29

= 6.45%

Hence, Using the degree of operating leverage, estimated impact on net operating income of a 5 % increase in sales is 6.45%.

Learn more about operating leverage:

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When marketing managers looks for a relationship between past sales and one or more independent variables, such as population, p

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An effective mathematical formalism which enables one to analyze the interaction among two or more interest factors is understood as a regression analysis. While there are several forms of regression analysis, they all analyze the effect of one or more independent variables on a dependent variable at their source.

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A local charity has been given a grant to serve free meals to the homeless in its community, but it is worried that its program

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3200 > t^2
t < 40√2 = 56.6
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3 years ago

A company had inventory on November 1 of 5 units at a cost of $20 each. On November 2, they purchased 10 units at $22 each. On N

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Answer: A $304

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On November 1, total value of inventory = $20 × 5 =$100

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On November 6, total value of inventory = $320 +($25×6) = $470

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3 years ago

Crane Co. uses the gross method to record sales made on credit. On June 1, 2017, it made sales of $52,200 with terms 3/15, n/45.

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Answer:

Explanation:

Crane Co

June 1. Credit: Sales $52,200

Debit: Acc receivable $52,200

Being sales on account

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Debit: Discount Allowed $1,566

Credit: Acc receivable. $52,200

Being payment received on sales

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2 years ago

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Drag the Low risk and High risk project points so their expected rates of return are 9% and 11%, respectively. If you could choo

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Answer:

a. Project Low because its expected rate of return is higher than its WACC

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