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zzz [600]
3 years ago
13

Degree of Operating Leverage Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable c

ost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 3,500 units sold is $58,500. Required: Calculate the degree of operating leverage. Note: Round answer to one decimal place.
Business
1 answer:
Anna11 [10]3 years ago
3 0

Answer:

1.8

Explanation:

Sales= $60

Variable cost= $21

Quantity= 3,500 pairs of shoes

Fixed operating cost= $58,500

The first step is to calculate the total contribution margin

= sales-variable cost × Quantity

= $60-$21 × 3500

= $39 × 3500

= $136,500

The operating income can be calculated as follows

= Sales - variable cost × Quantity - fixed operating costs

= $60-$21×3500-58,500

= $136,500-58,500

= $78,000

Therefore the degree of operating leverage can be calculated as follows

= Total contribution margin/Operating income

= 136,500/78,000

= 1.8

Hence the degree of operating leverage is 1.8

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The thing that must occur in the muscle to increase tension so he can pick up this heavy piece of furniture will be <span>recruitment of additional motor units. Jorge need to recruit additional motor units so that he can carry / pick up his sofa and his muscle will increase its tension so he can pick up his heavy sofa.</span>

8 0
3 years ago
When the coupon rate on newly issued bonds ________ relative to older, outstanding bonds, the market price of the older bond ___
azamat

Answer:

The Answer is B) Rises in the secondary market decreases.

                                 

Explanation:

When the coupon rate on newly issued bonds<u> decreases</u> relative to older, outstanding bonds, the market price of the older bond rises in the <u>secondary market.</u>

<u></u>

A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate

For example, a $2,500 bond with a coupon of 10% pays $250 a year. Typically these interest payments will be semiannual, meaning the investor will receive $250 twice a year.

If two bonds offer different coupon rates while all of their other characteristics (e.g., maturity and credit quality) are the same, the bond with the lower coupon rate generally will experience a greater decrease in value as market interest rates rise.

Bonds offering lower coupon rates generally will have higher interest rate risk than similar bonds that offer higher coupon rates.

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4 0
3 years ago
Your proforma income statement shows sales of $1,033,000, cost of goods sold as $503,000, depreciation expense of $103,000, and
Gelneren [198K]

Answer:

Proforma Earnings:              $

Sales                             1,033,000

Cost of goods sold       (503,000)

Depreciation expense  (<u>103,000)</u>

Earnings before tax      427,000

[email protected]%                      <u> (170,800)</u>

Proforma earnings        <u>256,200</u>

<u />

Free Cashflow                   $

Proforma earnings         256,200

Add: Depreciation         <u> 103,000</u>

Free cashflow                <u> 359,200</u>

Explanation:

Proforma earnings equal sales minus cost of goods sold minus depreciation minus tax.

Free cashflow is proforma earnings plus depreciation. Since depreciation does not involve movement of cash, it needs to be added back to the proforma earnings in order to obtain free cashflow.

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3 years ago
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Answer:

Friedman Doctrine

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Straw men theory is based on Friedman doctrine which states that the main responsibility of an organisation is to take steps for the betterment of their shareholders. They must follow all the ethical guidelines to achieve the objective. They must perform the duties according to ethical norms, without fraud and deception. So a business must follow all the corporate social responsibilities.

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4.The desire to work hard and be creative to earn a higher profit is called
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Profit Motive is the answer 
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