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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

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RUDIKE [14]

Question Completion:

Estimated manufacturing overhead costs = $156,000

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Estimated direct materials cost = $350,000

Answer:

Pajama Corp.

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Explanation:

a) Data and Calculations:

Estimated manufacturing overhead costs = $156,000

Estimated direct labor cost = $390,000

Estimated direct materials cost = $350,000

Cost driver rate = $0.40 ($156,000/$390,000)

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3 years ago

Terrence Industries charges manufacturing overhead to products by using a predetermined application rate, computed on the basis

puteri [66]

Answer:

See below

Explanation:

First, we need to get the predetermined rate

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= $30

We will now calculate the application.

Actual labor hours × rate

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= $1,845,000

We will now compare actual with overhead cost

= Applied Overhead cost - Actual manufacturing overhead

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Magnira Inc. is trying to promote its cosmetics. It offers discounts to customers who post about its products' benefits in their

Assoli18 [71]

Answer:

Word of Mouth.

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4 years ago

What reasons would retailers have for marking prices lower

UkoKoshka [18]

To attract customers to their store and not their more expensive competitors?

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3 years ago

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nlexa [21]

Answer:

If the money supply is MS2 and the value of money is 5, then the quantity of money

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