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Klio2033 [76]
3 years ago
11

Frontier Corp. sells units for $57, has unit variable costs of $29, and fixed costs of $164,000. If Frontier sells 10,000 units,

what is its degree of operating leverage?
Business
1 answer:
jeka943 years ago
6 0

Answer:

2.4

Explanation:

Frontier corporation sells unit for $57

The unit variable cost is $29

Fixed cost is $164,000

Frontier sells 10,000 units

The first step is to calculate the contribution margin

= 57-29×10,000

= 28×10,000

= 280,000

Profit = 280,000-164,000

= 116,000

Degree of operating leverage can be calculated as follows

= 280,000/116,000

= 2.4

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Carver Packing Company reports total contribution margin of $72,000 and pretax net income of $24,000 for the current month. In t
vlada-n [284]

Answer:

The degree of operating leverage and the expected percent change in income, respectively, are 3.0 and 24%. The right answer is E.

Explanation:

In order to calculate the degree of operating leverage we would have to use the following formula:

opearting leverage=<u>contribution margin</u>

                                  operating income

operating leverage=<u>$72,000</u>

                                  $24,000

operating leverage=3.0

In order to calculate the degree of expected percent change in income we would have to use the following formula:

percent change in income=percent change in sales×operating leverage

percent change in income=8%×3

percent change in income=24%

The degree of operating leverage and the expected percent change in income, respectively, are 3.0 and 24%

7 0
3 years ago
Apricot Corporation has decided to buy a new glazing machine for its factory. The machine's cost is $50,000 and the expected inc
Kisachek [45]

Answer:

$12,841.03

Explanation:

Given:

Initial Investment = $50,000

1st year expected income = $19,000

2nd year expected income = $25,000

3rd year expected income = $30,000

Expected rate of return = 8% = 8/100 = 0.08

Net present value = ?

Computation of net present value:

Net present value = C0 + \frac{C1}{(1+r)^1}+ \frac{C2}{(1+r)^2}+ \frac{C3}{(1+r)^3}

50,000 + \frac{19,000}{(1+0.08)^1}+ \frac{25,000}{(1+0.08)^2}+ \frac{30,000}{(1+0.08)^3}\\\\50,000 + \frac{19,000}{(1.08)^1}+ \frac{25,000}{(1.08)^2}+ \frac{30,000}{(1.08)^3}\\\\50,000 + \frac{19,000}{(1.08)}+ \frac{25,000}{(1.1664)}+ \frac{30,000}{(1.259712)}\\\\50,000 + 17,592.5926+ 21,433.4705+ 23,814.9672\\\\112,841.03\\\\

Net present value = $112,841.03

5 0
3 years ago
In a period of rising prices, the inventory method that produces the lowest ending inventory is the:
Dmitry [639]

Answer:

LIFO Periodic method

Explanation:

The LIFO means Last In First Out this means that item that have been stocked today would be sold first although there’s still some inventory from previous periods.

Using LIFO would result in lower ending inventory because closing inventory would be valued at low price which they had been bought assuming that there’s now a hick in price and goods in the warehouse were stocked when prices were low.

LIFO is used for the manipulation of profit.

8 0
3 years ago
For your business to be successful you will need a strategy for beating the competition, that is, a ________.
Natali5045456 [20]
The answer is the letter "B" Competitive Advantage.
5 0
3 years ago
An enterprise resource planning (ERP) system is: a. a collection of integrated software for every functional area within an orga
Helen [10]

Answer:

An enterprise resource planning (ERP) system is:

(a) A collection of integrated software for every functional area within an organization.

Explanation:

7 0
3 years ago
Read 2 more answers
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