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raketka [301]
3 years ago
12

sells authentic Amish quilts on her website. Suppose Sally expects to sell 1 comma 800 quilts during the coming year. Her averag

e sales price per quilt is $ 350​, and her average cost per quilt is $ 150. Her fixed expenses total $ 135 comma 000. Compute Sally​'s operating leverage factor at an expected sales level of 1 comma 800 quilts. If sales volume increases 15​%, by what percentage will her operating income​ change? Prove your answer by calculating operating income at a sales volume of 1 comma 800 and at a sales volume of 2 comma 070.
Business
2 answers:
fomenos3 years ago
4 0

Answer:

It will increase by 37.5%

Explanation:

<u>we solve for the variable cost first:</u>

135,000 fixed cost / 1,800 units = 75

average cost 150

less unit fixed cost of 75

variable cost 75

contribution: (350 - 75)/ 350 = 0,7857

Now we construct the operating income at the given sales level

sales revenue 1,800 x 350 = 630,000

variable cost 1,800 x 75 =    <u>  (135,000)</u>

contribution                            495,000

fixed  cost                            <u>    135,000  </u>

operating income                  360,000

increase of 15% in sales 1,800  x 1.15 = 2,070

sales revenue 2,070 x 350 =   724,500

variable cost   2.070 x   75  =<u>  (155,250)  </u>

contribution                              569,250

fixed  cost                               <u>  (135,000)  </u>

operating income                     434,250

Now, we solve for the operating leverage

495,000 / 360,000 = 1.375

360,000 x (1 + 1.375 x 0.15) = 434,250

Serjik [45]3 years ago
3 0

Answer:

1) Operating Leverage Factor = Contribution margin / net income

                                                = $360,000 / $225,000

                                                = 1.6

2 ) % change in Net income = 1.6 *15%

                                              =24%

PROOF  

Income Statement                              1,800 units            2,070 units

Sales                                                 $630,000               $724,500

Variable cost                                   -$270,000              -$310,500

Contribution                                     $360,000               $414,000

Fixed Cost                                       -$135,000               -$135,000

Net Income                                       $225,000               $279,000

change = 279,000 - 225,000 = $54,000

% Change = $54,000 / $225,000

                 = 0.24 *100 = 24%

Explanation:

1) Income Statement    

Sales (1,800 *$350)                                                     $630,000

Variable Cost (1,800*$150)                                        -$270,000

Contribution                                                                $360,000

Fixed Cost                                                                 -$135,000

Net Income                                                                 $225,000

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I hope my answer helps you

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Calculate the activity rate per grooming order. $fill in the blank 1 per grooming order 2. Calculate, in terms of grooming order
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Solution :

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Activity rate                                                        <u>    Amount paid to agent     </u>

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                                                                             <u>            28,000          </u>

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Therefore, the activity rate  = 7 per grooming order

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a. Total activity availability

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   Number of agents (B)                                            <u>            5   </u>

  Total activity availability (A x B)                               20,000

b). Total activity availability                                     20,000

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Unused capacity                                                     2,200

3. calculating the dollar cost of :

a). Amount paid to the agent (A                       28,000

Number of agents (B)                                      <u>          5    </u>

Total activity availability in dollars (AxB)        140,000

b). Unused capacity (A)                                       2,200

Activity rate (B)                                                 <u>           7 </u>

Unused capacity in dollars (AxB)                    15,400

                                                 

4 0
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Mary purchased a home in year 1 for $200,000. She made a 20-percent down payment and financed the rest with a 15 year loan at si
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Answer:

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For 2019, Mary can deduct mortgage interests from her first loan and the interests from her home equity loan as itemized deductions. Deductions are available for mortgage debt and other home equity loans up to $500,000 for single filers and $1,000,000 for married joint filers.

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Chris purchased a 10 year 100 par value bond where 6% coupons are paid semiannually. Cheryl purchased a 100 par value bond where
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When an employee clocks in or out, they generally put a time ticket into a time clock that are printed in an oblong, thick paper shape. Usually time tickets are physical cards that are stamped with beginning and ending times of employees work days. The payroll accountant or bookkeeper creates time tickets after the pay month has ended.

To learn more about employee time ticket here

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