All categories

3 years ago

If sales are $400,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage

Business

1 answer:

viva [34]3 years ago

3 0

Answer:

operating leverage= 0.17

Explanation:

Giving the following information:

Sales= $400,000

Variable costs= 75% of sales

Operating income= $40,000

To calculate the operating leverage, we need to use the following formula:

operating leverage= fixed costs/total costs

Fixed costs= (400,000*0.25) - 40,000= 60,000

Total costs= 400,000*0.75 + 60,000= 360,000

operating leverage= 60,000/360,000

operating leverage= 0.17

You might be interested in

On December 30, 2005, Bart, Inc. purchased a machine from Fell Corp. in exchange for a non-interest bearing note requiring eight

Darya [45]

Answer: c. $94,240

Explanation:

On December 31, 2005, one payment has already been made which would mean that only 7 payments are left. As the first of these remaining 7 will be paid the year after, this is an ordinary annuity.

Note payable value = Present value of seven $20,000 payments

= 20,000 * Present value of ordinary annuity of 1 at 11% for 7 years.

= 20,000 * 4.712

= $94,240

5 0

3 years ago

Varun's coaching center trains runners for elite races. last week, varun fired one of his ineffective coaches, and immediately t

ladessa [460]

<span>The marginal product of the previous coach would have been negative because the removal of the last coach improved the performance of the runners which had decreased owing to negative marginal product of the coach.</span>

7 0

3 years ago

If protective import-restricting tariffs are imposed by a country, in the majority of cases that nation's consumers end up consu

Wittaler [7]

Answer:

If protective import-restricting tariffs are imposed by a country, in the majority of cases that nation's consumers end up

paying a higher price for the good than they otherwise would.

Explanation:

Import-restricting tariffs increase the cost of goods and services imported from other countries. Governments have various reasons for making such impositions. Some claim that the tariffs are imposed to protect local industries or to comply with local content requirements. However, these restrictions hamper free trade. They also distort the competitiveness of nations.

3 0

3 years ago

What are the two most popular ways people make networking contacts?

Semmy [17]

Answer:

Explanation:

Every contact you meet should lead you to new contacts. That's why it's called networking – just like a net, every connection leads off in two or more directions. Your contacts fall into two groups: those who you immediately know might be able to help you, and those who you don't see any point in talking to.

5 0

2 years ago

The graph below represents the low-wage labor market demand curve for a U.S. city; there is also a line (MinWg) showing a $12 ho

alexandr402 [8]

The new ordinance will make a difference when the new wages will be binding.

<h3>How to depict the information?</h3>

It should be noted that the supply curve shows the relationship between the price and the quantity supplied.

Based on the information given, when the equilibrium wage is above the minimum wage, the ordinance won't make a difference.

On the other hand, when the equilibrium wage is below the minimum wage, it'll make a difference for the worker.

Therefore, joining the lowest of the two points will give the equilibrium.

Learn more about supply curve on:

brainly.com/question/26430220

#SPJ11

7 0

2 years ago