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3 years ago

Given the following financial data for Boston Technology, compute the firmâs degree of combined leverage.

Business

1 answer:

Otrada [13]3 years ago

7 0

Answer:

For year 2010

Degree of combined leverage is 3.82

For year 2011

Degree of combined leverage is 4.11

Explanation:

Computing the degree of combined leverage of the firm with the formula stated below as:

Degree of combined leverage = Contribution margin / EBT

where

Contribution margin is computed as:

Contribution margin = Sales - Variable Cost

EBT (Earnings Before tax) is computed as:

EBT = EBIT - Interest

Now, computing the same by applying the formula:

For year 2010

Contribution margin = $700,000 - $406,000

= $294,000

EBT = $119,000 - $42,000

= $77,000

Degree of combined leverage = $294,000 / $77,000

= 3.82

For year 2011

Contribution margin = $760,000 - $448,000

= $312,000

EBT = $122,000 - $46,000

= $76,000

Degree of combined leverage = $312,000 / $76,000

= 4.11

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The variety of Riverside Ranger logo T-shirts includes 12 different designs. Setup between designs takes one hour (and $18,000),

cluponka [151]

Answer:

The production exhibit both scope economics and scale economics. They are not mutually exclusive.

Explanation:

Looking at the scenario critically, we will clearly see the tendency of a scope economics. Scope economics basically hinges on getting a competitive advantage, essentially because of producing in large quantities and numbers. Riverside Ranger logo T-shirts exhibits this as it produce its products in large numbers, producing 1000 pieces of a particular design in 1 hour.

In same breath, we also have the scale economics exhibited by the organization. Taking a deeper look at the cost representation, we will see that the average cost tend to reduce as the production increases. Thus, an economic of scale is achieved here by leveraging on the mass and swift production style of Riverside Rangers logo T-shirts.

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3 years ago

Doogan Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or Rate Direct ma

telo118 [61]

Answer:

Direct material quantity variance= $6,300 unfavorable

Explanation:

Giving the following information:

Direct materials 2 grams $7.00 per gram

The company produced 4,600 units in January using 10,100 grams of direct material.

To calculate the direct material quantity variance, we need to use the following formula:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (2*4,600 - 10,100)*7

Direct material quantity variance= $6,300 unfavorable

5 0

3 years ago

Imperial Jewelers manufactures and sells a gold bracelet for $403.00. The company’s accounting system says that the unit product

AysviL [449]

Answer:

a) Financial advantage  $2,208 

b) The company should accept the special order, as it will increase its profit by $2,208

Explanation:

The relevant costs for decision to accept the special order are

I Incremental Revenue from the special order

2. incremental variable cost

3. The cost of the special tool

Unit variable cost = 143 + 90 + 8 + 7 = $240

Note that that the increase in material cost of $8 and the variable manufacturing overhead of $7 are relevant to the special order decision. Hence they are added.

And the balance of manufacturing overhead would be incurred either way. Therefore , they are not relevant for the decision

Sales revenue from special order

(22× $361.00) 7942

Variable cost of special order

(22× $240 ) (5280 )

Cost of special tool (454)

Financial advantage  2,208 

The company should accept the special order, as it will increase its profit by $2,208

3 0

3 years ago

Which is the penultimate step in the planning process?

Studentka2010 [4]

Hello, The first step of financial planning process is to define specific goals. Since this is the first step I figured it is the most important.
Hope this helps..

8 0

3 years ago

Lisa Company uses the periodic inventory system and had 100 units in beginning inventory at a total cost of $10,000. The company

skelet666 [1.2K]

Answer:

FIFO $10,400

LIFO $8,000

AVERAGE COST $9,600

Explanation:

Lisa Company

(1) FIFO

Purchases during the period:

100 units at $100 = $10,000

200 units at $130 = $26,000

Units sold during the period = 220

Cost of units sold

=100*$100+120*130=$25,600

Value of ending inventory

=10,000+26,000-25,600

=$10,400

(2) LIFO

Purchases during the period:

100 units at $100 = $10,000

200 units at $130 = $26,000

Units sold during the period = 220

Cost of units sold

=20*$100+200*130=$28,000

Value of ending inventory

=10,000+26,000-28,000

=$8,000

(3) average-cost

Purchases during the period:

100 units at $100 = $10,000

200 units at $130 = $26,000

average cost per unit

=(10,000+26,000)/300

=$120 per unit

Units sold during the period = 220

Cost of units sold

=220 * $120

=$26,400

Value of ending inventory

=36,000-26,400

=$9,600

8 0

4 years ago