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
Crazy boy [7]
3 years ago
8

Problem 11-11 Calculating Operating Leverage [LO4] At an output level of 62,000 units, you calculate that the degree of operatin

g leverage is 3.7. The output rises to 67,000 units. What will the percentage change in operating cash flow be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Will the new level of operating leverage be higher or lower?
Business
1 answer:
Mandarinka [93]3 years ago
3 0

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.

You might be interested in
A competitive market is a market in which
Alexandra [31]

Answer:

d. no individual buyer or seller has any significant impact on the market price.

Explanation:

A competitive market is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price.

4 0
3 years ago
Thomlin Company forecasts that total overhead for the current year will be $7,584,000 with 158,000 total machine hours. Year to
IRINA_888 [86]

Answer:

(D) $48 per machine hour

Explanation:

The predetermined overhead rate is given by total estimated overhead divided by the total estimated machine hours

Total estimated overhead = $7,584,000

Total estimated machine hours = 158,000 hours

Predetermined rate = $7,584,000 ÷ 158,000 hours = $48 per machine hour

4 0
3 years ago
Read 2 more answers
Which of the following loans will typically offer the lowest interest rate
Kay [80]


The loan that offers the lowest interest rate is federal student loan. Payday loan and private loan have higher interest rate relatively which can increase the future worth of the money borrowed. if the interest would have been lower, then the future worth or the money to be paid in the future would be less
7 0
2 years ago
suppose the fimrs hires each unit of labor for $700 per week, and each unit of output sells for $9. How many workers will the fi
rusak2 [61]

Answer:

The question is missing the amount of output units that each additional unit of labor generates, but we can calculate how many units each additional unit of labor should produce in order to maximize profit.

In order for a firm to maximize its profit, the marginal revenue product (MRP) = marginal cost (MC).

MRP = output units per additional unit of labor x price per unit = U x $9

MC = $700

U x $9 = $700

U = $700 / $9 = 77.78, so we round up to 78 units

In order to maximize profit, each additional unit of labor must generate 78 additional units of output.

6 0
3 years ago
Negotiated transfer prices
horrorfan [7]
The devision agrees a transfer price between themselves. This price may not reflect opportunity cost by producing and selling products. Reflects bargaining prowess of individual mangers.
6 0
2 years ago
Other questions:
  • Assume that Diego has S400 per month to divide between playing paintball and playing golf. Assume that playing paintball costs S
    13·1 answer
  • A detailed list of questions submitted to external vendors to determine how well they meet the organization's specific requireme
    12·1 answer
  • Kevin is the financial manager of levingston bmw. the shop allows employees to purchase up to two vehicles at a discount. leving
    9·1 answer
  • Some universities offer online degree programs, competing with traditional colleges based on the convenience of taking online co
    9·1 answer
  • On January 4, 2013, Franc Company purchased for $27,000 a patent that had been filed 8 years earlier. The patent covers a manufa
    15·1 answer
  • The balance sheet of Bonita Company at December 31, 2016, includes the following. Notes receivable $36,200 Accounts receivable 1
    12·1 answer
  • If a stock's market price exceeds its intrinsic value as seen by the marginal investor, the the investor will sell the stock unt
    14·1 answer
  • Which economic system supports government control of major basic industries but allows a high degree of personal and economic fr
    11·1 answer
  • When there is a climate of mistrust, employees Multiple Choice focus only on individual incentives. tend to create conflict. are
    5·1 answer
  • Management of Wee Ones (WO), an operator of day-care facilities, wants the company's profit to be subdivided by center. The firm
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!