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
sesenic [268]
3 years ago
13

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a

small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 60,000 of these balls, with the following results:
Sales (60,000 balls) $1,500,000
Variable expenses 900,000
Contribution margin 600,000
Fixed expenses 375,000
Net operating income $225,000

Required:
a. Compute the CM ratio and the break-even point in balls.
b. Compute the the degree of operating leverage at last year
Business
1 answer:
LUCKY_DIMON [66]3 years ago
5 0

Answer:

A. 37,500 balls

B.2.67

Explanation:

A. Compution for the CM ratio and the break-even point in balls.

First step is to calculate the Contribution margin

Selling price $25 100%

Variable expenses $15 60%

Contribution margin $10 40%

($25-$15)

Now let calculate the CM ratio and the break-even point in balls using this formula

Unit sales to break even=Fixed expenses/Unit contribution margin

Let plug in the formula

Unit sales to break even=$375,000/$10

Unit sales to break even= 37,500 balls

Therefore the CM ratio and the break-even point in balls will be 37,500 balls

b. Computation for the degree of operating leverage at last year

Using this formula

Degree of operating leverage =Contribution margin/Net operating income

Let plug in the formula

Degree of operating leverage=$600,000/$225,000=

Degree of operating leverage = 2.67 (rounded)

Therefore the degree of operating leverage at last year will be 2.67

You might be interested in
Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,110,00
Ksivusya [100]

Answer:

$1,83,000

Explanation:

Sales = 4,535,000

Cost of goods sold = $2,560,000

Operating expenses  =  $1,382,000

Average total assets = $4,110,000

Net Income =  Sales - Cost of goods sold -  Operating expenses

= $4,535,000 - $2,560,000 -  $1,382,000

=  $5,93,000

Target income = 10%  of Average total assets

= 0.10 × $4,110,000

= $410,000

Thus,

Residual income = Net income - Target income

= $5,93,000 - $410,000

= $1,83,000

7 0
2 years ago
The output of u. S. Citizens who work in canada would be included in the
mestny [16]

The output of u. S. Citizens who work in Canada would be included in the: D. Gross domestic product.

<h3>What is gross domestic product?</h3>

Gross domestic product  can be defined as the value of goods or products produce within a country at a particular period of time.

If a united State of American citizen work in Canada the output of the United State citizen will be added to the Gross domestic product of Canada.

Therefore the correct option is D.

Learn more about gross domestic product here:brainly.com/question/1383956

#SPJ12

6 0
1 year ago
1. Assume that Lyn Addie is an unmarried employee. Her $1,000 of wages have deductions for FICA Social Security taxes, FICA Medi
fredd [130]

Answer:

Net pay $764.5

Explanation:

given data

wages = $1000

income taxes  = $159

solution

particular                              net pay

Gross wages                        $1000

less  

Income taxes withheld         $159

FICA-social security             (1000×6.2%)    = $62

FICA-Medicare taxes           (1000×1.45%)   =       $14.5

Total taxes withheld             (235.5)

So, Net Pay                            $764.5

5 0
2 years ago
Choose all that apply. Select all of the reasons an individual would save his money in a CD. High interest rates the amount depo
sasho [114]

High interest rates

Safe

No fees

6 0
3 years ago
Read 2 more answers
Using the tables above, what would be the present value of $15,000 to be received at the end of each of the next 2 years, assumi
LUCKY_DIMON [66]
The answer to this question is: D. 30,000
7 0
3 years ago
Other questions:
  • A useful guideline in designing policies and operating procedures that facilitate good strategy execution is ________.
    13·1 answer
  • According to economists, when two people make the exactly opposite decision:
    14·1 answer
  • How did Apple become successful?
    13·1 answer
  • Oriole Corp. is a fast-growing company whose management expects it to grow at a rate of 24 percent over the next two years and t
    6·1 answer
  • What are expenses that change as conditions change?
    13·2 answers
  • Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also assume that in 1984 each bucke
    11·1 answer
  • On December 31, 2020, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconve
    5·1 answer
  • Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charg
    15·1 answer
  • Jennifer Schwab is an investor in The Handy Man Pro Shops. On January 1, she purchased 225 shares of stock at a price of $15 per
    7·1 answer
  • Sally opened her own business and resigned from a job paying $25,000 per year. Her savings acccount pays 8% interest, but she wi
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!