1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
navik [9.2K]
3 years ago
14

At an output level of 15,200 units, you have calculated that the degree of operating leverage is 2.60. The operating cash flow i

s $57,500 in this case. Ignore the effect of taxes. a. What are fixed costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What will the operating cash flow be if output rises to 16,200 units?
Business
1 answer:
inessss [21]3 years ago
4 0

Answer:

Will increase up to $67,332.5

Explanation:

As per the information we have,

output level = 15,200units

operating leverage = 2.60

operating cash flow = $57,500

First we will calculate the fixed cost:

we can calculate fixed cost with the help of degree of operating leverage formula:

degree of operating leverage = 1 + fixed cost / operating cash flow

2.60 = 1 + fixed cost / 57,500

57,500 + fixed cost = 2.60 * 57,500

fixed cost = 149,500 - 57,500 = $92,000 is the fixed cost.

Now, let us calculate the operating cash flow if output rises to 16,200units:

Percentage Change in Quantity Sold = (16,200 – 15,200) / 15,200 = 0.0658 or 6.58% Percentage Change in OFC = DOL × Percentage Change in Quantity Sold    

= 2.6 × 0.0658 = 0.171

New OCF = 57,500 * ( 1 + 0.171)

= 57,500 × 1.171 = $67,332.5

You might be interested in
You are going into business with 4 equal partners (not counting yourself). If in 6 years, the business is making a profit of $1,
GarryVolchara [31]
I think ty best answer would be b.
3 0
4 years ago
If you know that the value of an asset is $100 today, what concept will tell you what it will be worth in 5 years given a certai
Virty [35]

Answer:

future value

Explanation:

Future value is the value of a sum of money at some point in the future given a  certain interest rate.

Formula for future value = present value x ( 1 + r )^n

Assuming i = 10

the future value of $100 in 5 years = 100 x ( 1.1)^5 = $161.05

6 0
3 years ago
What is the main advantage of using e-mail to complain about a service or product?
anzhelika [568]

Unlike conventional mail, email can send your complaint within minutes or seconds to the company.  This is the reason why use of email has become popular.  The reaction to act on the complaint will depend on the company.  Sending an email does not guarantee that they will act on it right away. 

4 0
3 years ago
Blossom Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be dri
Ghella [55]

Answer:

$0.20 per miles, $6,400, $6,540

Explanation:

The calculation of the depreciation per unit and its expense method is presented below:

= (Original cost - residual value) ÷ (estimate driven miles)

= ($33,600 - $200) ÷ (167,000 miles)

= ($33,400) ÷ (167,000 miles)

= $0.20 per miles

Now for the 2021 year, it would be

= Miles driven in 2021 year × depreciation per miles

= 32,000 miles × $0.20

= $6,400

And, in 2022, it would be

= Miles driven in 2022 year × depreciation per miles

= 32,700 miles × $0.20

= $6,540

3 0
3 years ago
Marisol's online jewelry store originally sold only earrings and necklaces for women. After adding men's rings and cuff links, p
den301095 [7]

Answer: C. Profitability of unisex watches.

Explanation: Merchandising strategy is a business tactics or process that contribute or bring in sales of goods and services for profit.

Marisol made double profit when she added men cufflinks and men rings to her online jewelry store business. Now she wants to consider adding unisex watches to it, using merchandising strategy she should consider the profitability of " unisex watches ".

5 0
3 years ago
Other questions:
  • Summit Products, Inc. is interested in producing and selling an improved widget. Market research indicates that customers would
    13·1 answer
  • True or false. the consumer sector is the largest part of the macroeconomy.
    5·1 answer
  • The effects of paying a dividend on the basic accounting equation are to a. decrease assets and decrease stockholders' equity. b
    9·1 answer
  • Identification of problems is challenging. What portion of an MIS system would make managers aware of promotions that are cannib
    6·1 answer
  • Sam owns a small apartment building. This is the only rental building that Sam owns. During the year, Sam incurs the following e
    10·1 answer
  • Substitution bias is a problem when measuring the consumer price index because A) consumers are eager to buy new products as the
    6·1 answer
  • A regular guest requests his wife’s favorite dish a short while before the kitchens closing time. The chef informs the guest tha
    14·1 answer
  • n rural areas electrical power is often sold by ____________ that take advantage of the government's policy to sell them electri
    13·1 answer
  • Government purchases include government spending on.
    14·1 answer
  • When collective decision making is utilized to resolve economic questions regarding the allocation of resources,
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!