Answer:
Degree of Operating Leverage = 1.34
The Operating cash flow increases by 12%
The new operating cash flow is $290200
Explanation:
% change in Operating Cash Flow = Degree of Operating Leverage * % change in sales
There is need to calculate Degree of operating leverage first. Degree of operating leverage = Contribution / EBIT
Where Contribution = OCF + Fixed costs / OCF
Fixed costs= Total costs - variable costs = 300000 - 215000
Fixed Cost= 85000
Degree of operating leverage = (250000 + 85000) / 250000
DOL= 1.34
% change in OCF = DOL * % change in sales
% change in sales = (56000 - 50000) / 50000 = 12%
% change in OCF = 1.34 * 12% = 16.08%
New OCF = 250000 * (1+16.08%)
=$250000 * (1 + 0.1608)
=$250000(1.1608)
= $290200
Answer:
Annual depreciation= $12,970
Explanation:
Giving the following information:
Kansas Enterprises purchased equipment for $72,500 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $7,650 at the end of five years.
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (72,500 - 7,650)/5
Annual depreciation= $12,970
Answer:
Total costs= $75,000
Explanation:
Giving the following information:
For 10,000 units:
$40,000 for direct labor
$4,000 for electric power
Total fixed costs are $23,000
We need to determine the unitary variable cost for direct labor and electric power:
Unitary direct labor= 40,000/10,000= $4
Electric power= 4,000/10,000= $0.4 per unit
Now, for 12,000 units:
Total direct labor cost= 4*12,000= $48,000
Electric power= 0.4*12,000= $4,800
Fixed costs= 23,000
Total costs= $75,000
Answer:
The answer is market strategy development stage.
Explanation:
During the market strategy development phase, it is analyzed if your product fits into your business strategic plans. A probable demand, the costs and the margins are estimated. Questions like what is the target market and which market share is expected need to be answered.
