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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

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Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning Inventory 23 units $16 5 Sale 1
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Answer:

(a) the cost of the goods sold for the September 30 sale and

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Explanation:

date        transaction           units         unit price          total

1              beginning inv.        23                $16               $368

5             sale                        -13                                    ($208)

17            purchase               24                 $17               $408

30           sale                       -25                                    ($415)

30           ending inv.              9                 $17               $153

When we use first in, first out (FIFO) inventory method, the price of the units sold are calculated using the oldest units in inventory.

The COGS of the units sold on Sept. 5 = 13 units x $16 = $208

The COGS of the units sold on Sept. 30 = (10 units x $16) + (15 units x $17) = $160 + $255 = $415

Ending inventory = 9 units at $17 = $153

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