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
Keith_Richards [23]
3 years ago
11

Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company’s degree of operating l

everage. (2) If sales increase by 15%, what amount of income will Singh Co. expect?
Business
1 answer:
Alex3 years ago
4 0

Answer: 1. Degree of Operating Leverage = 4

2. $384,000

Explanation:

1. Degree of Operating Leverage is calculated by dividing the Contribution margin by the Net Operating income.

Now, the Contribution margin is the difference between Price and Variable Cost. This means that if you remove fixed costs from it as well you get your profit.

Therefore 1. can be calculated thus,

Degree of Operating Leverage = Contribution Margin / Net Operating income

Degree of Operating Leverage = 960,000 / 960,000 - 720,000

Degree of Operating Leverage = 4

2. When Sales increases by a certain percentage we multiply that percentage by the Degree of Operating Leverage to find out how much Income will increase by.

Because sales went up by 15%, Singh Co. can expect that income would rise by,

= 15% * 4

= 60%.

Now income is Contribution margin - fixed costs so we have,

Income = 960,000 - 720,000

Income = $240,000

An increase of 60% would be

= 240,000( 1+ 60%)

=$384,000

$384,000 is the amount of income that Singh Co. can expect.

You might be interested in
PLEASE HELP ASAP
34kurt

one could be food im not really



7 0
3 years ago
Doug is the vice president of product development for a corporation that makes flavored honey. Doug proposes to the board that t
kogti [31]

Answer:

most likely will not be held responsible because of the business judgment rule.

Explanation:

A business judgement rule is a legal provision that protects the board of a company from frivolous legal actions as flregards its business decisions.

Boards of companies are assumed to act in good faith, within their fiduciary standards of loyalty, prudence and care that the board owes to shareholders.

It will have to be proven that the board blatantly violated a code of conduct, otherwise the court will review or question it's decisions.

8 0
3 years ago
Read 2 more answers
5. Michael told Greg to sell his collection of vintage heavy metal band t-shirts. He
kiruha [24]

Answer:

The correct answer is Greg. He is the agent.

Explanation:

First of all, the term <em>agent</em>, in business, is understand as the individual that currently <em>manages another person's business affairs</em> and that commonly spend much of his time negotiating contracts for his clients.

Secondly, according to the definition of agent, it is understandable that in this case the agent is Greg due to the fact that he is the one that has to sell the collection, under Michael's orders.

4 0
3 years ago
1 of 5) What does it mean to "Diversify" your portfolio?
eduard

Answer:

D. A and B

Explanation:

5 0
3 years ago
Pls help for questions no 2, 3, 4, 7, 8, 9, 10
Montano1993 [528]
I can’t see the question
5 0
3 years ago
Other questions:
  • Why might some firms voluntarily pay workers a wage above the market equilibrium
    9·1 answer
  • If demand shifts to the right when income increases, we can conclude that the good is:_____
    5·1 answer
  • Career cluster help identify the knowledge and skills needed to;
    15·1 answer
  • The company makes 340 units of product P23F a year, requiring a total of 710 machine-hours, 80 orders, and 40 inspection-hours p
    12·1 answer
  • The accounts receivable balance is $1,000,000. After adjustment, the allowance for uncollectible account balance is $40,000. Net
    12·1 answer
  • Bond valuationThe process of bond valuation is based on the fundamental concept that the current price of a security can be dete
    11·1 answer
  • Old Doc White advised you to do your homework before applying for a consumer loan. Which of the following is his main piece of a
    5·1 answer
  • Fabio Corporation is considering eliminating a department that has a contribution margin of $39,000 and $78,000 in fixed costs.
    15·1 answer
  • If a CobbDouglas production function has alpha​ = 0.34 and beta​ = 0.42, then a​ 1% increase in inputs results in a​ ________ ch
    13·1 answer
  • At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $366,000 and Total Liabilities of $28,300 a
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!