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True [87]
3 years ago
13

Markup represents an amount needed to cover operating expenses. a. True b. False

Business
1 answer:
Illusion [34]3 years ago
8 0
Operating expenses are taken from the normal business operation such as administrative or selling expense. It is part of the operating cost. Markup is defined as the amount added to the cost of goods to fix a selling price. So, to answer the question above: True.
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Problem 11-11 Calculating Operating Leverage [LO4] At an output level of 62,000 units, you calculate that the degree of operatin
Mandarinka [93]

Answer:

Percentage change in sales = [(Ending value - Beginning value) / Beginning value] * 100

Percentage change in sales = [($67,000 - $62,000) / $62,000] * 100

Percentage change in sales = 0.080645

Percentage change in sales = 8.0645%

Percentage change in OCF = Percentage change in sales * Degree of operating leverage

Percentage change in OCF = 8.0645% * 3.7

Percentage change in OCF = 29.84%

Will the new level of operating leverage be higher or lower?

As the sales increase, contribution margin will remain constant but operating margin percentage will rise. Therefore, this leads to fall in operating leverage.

3 0
3 years ago
Margin of safety is computed as: a. Actual sales - Break-even sales. b. Contribution margin - Fixed costs. c. Break-even sales -
Vera_Pavlovna [14]

Answer:

A. Actual Sales - Break-even sales

Explanation:

In business studies, Margin of safety (MOS) is the difference between actual/projected/budgeted sales and the level of break even sales. It is calculated by subtracting break even sales from projected or budgeted sales.

It is usually calculated by a company to know the level of percentage by which sales can drop in that company, before they start incurring losses. IT IS A MEASURE OF BUSINESS RISK.

3 0
2 years ago
Calculate the present value of the after tax net returns to land in the 7th year if thereal pre-tax net returns to land today ar
Tatiana [17]

Answer:

PV(after-tax net return in 7th year) = 70.55 (Approx)

Explanation:

Given:

Number of year = 7

Pre-tax net returns (Fn) = $100

Growth rate = 4% = 0.04

Inflation = 3% = 0.03

Marginal tax rate = 30% = 0.3

Discount rate = 10% = 0.1

Computation:

Fn = Fo(1+g)ⁿ = 100(1.04)⁷

Fn = 131.6

Nominal net returns = 131.6(1.03)⁷

Nominal net returns = 161.85

After tax return = 161.85  (1 - 0.3)

After tax return = 113.30

After-tax, risk adjusted discount rate = 0.1(1-0.3) = 7%

PV(after-tax net return in 7th year) = 113.30 (1+0.07)⁻⁷

PV(after-tax net return in 7th year) = 70.55 (Approx)

8 0
2 years ago
Randomly listed below are the steps for preparing a trial balance: (1) Verify that the total of the Debit column equals the tota
liberstina [14]

A test balance is used to detect any calculation error that may have occurred within the accounting system. For this, it is sought to verify if the total debits and the total credits are equal, for this the balance of all accounting books is compiled in column totals of both debit and credit. A company usually prepares a trial balance periodically, usually at the end of each reporting period.

In this case, to carry out the trial balance, you must first clarify the name of the company, the title of the trial balance and the date on which the trial balance is prepared, then proceed to list the ledger accounts and enter the debit and credit balances in the respective columns, then the columns are totalized and finally it is verified that the credit totals are equal to the debit totals

Answer

The correct order of the steps is (3), (2), (4) and (1)

7 0
3 years ago
The Chinese government chooses to control the value of its currency so that it is consistently worth some fixed amount of U.S. d
Vadim26 [7]

Answer: pegged exchange rate

Explanation:

A pegged exchange rate also referred to as the fixed exchange rate, sometimes is an exchange rate regime type whereby the value of a currency is fixed by the monetary authority of a particular country against the value of the currency of another country.

This is the type of exchange rate used by the Chinese government in the question above.

8 0
3 years ago
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