A euro equals $1.08 in American dollars.
Answer:
See below
Explanation:
Raw materials purchased is computed as;
Raw material purchase = Ending inventory + required for production - beginning inventory
= 50,000 + ((80,000 + 770,000 - 30,000) × 3) - 60,000
= 50,000 + 2,460,000 - 60,000
= 2,450,000 grams
Answer:
* The company’s degree of operating leverage: 1.38;
* The impact on net operating income of a 22% increase in sales: it will increase by 30.4%;
* New contribution format income statement:
Engberg Company
Contribution format income statement
Amount Percentage of sales
Sales $176,900 100%
Variable expenses 70,760 40%
Contribution margin 106,140 60%
Fixed expenses 24,000
Net operating income 82,140
Explanation:
* The company’s degree of operating leverage = Contribution / profit = 87,000/63,000 = 1.38
* The impact on net operating income of a 22% increase in sales is calculated as: Degree of operating leverage x % changes in sales revenue = 1.38 x 22% = 30.4%.
* new contribution format income statement is shown in the answer part.
