Answer:
Option (c) is correct.
Explanation:
Variable cost as a percent of sales:
= (Variable expenses ÷ Sales) × 100
= ($3,000,000 ÷ $5,000,000) × 100
= 60%
If Sales = X
then Variable cost is 0.6X (i.e. 60% of Sales)
Sales - Variable cost - fixed expenses = net operating income
X - 0.6X - 1,500,000 = 300,000
0.4X = 300000 + 1500000 = 1800000
X = 1800000 ÷ 0.4
= 4,500,000
Answer:
92 days
Explanation:
Sales in Inventory = Average Inventory/ COGS x 365
<u>where:</u>
<em>average inventory = (beginning + ending ) / 2</em>
<em />
Cost of goods sold 153,703
Beginning Inventory 39,766
Ending Inventory 37,768
Average = (39,766+37,768)/2 = 38,767
(38,767 / 153,703) x 365 = 92.06 = 92 days
In average the company sales all his inventory every 92 days.
The correct option for X Company's degree of operating leverage (DOL) at the current sales volume level is calculated to be is A. 2.33
For X-Company :
Degree of operating leverage = Contribution ÷ EBIT i.e., operating income
= 60000 ÷ 25800
= 2.33 times
Operating leverage is a fee-accounting method that measures the degree to which a company or assignment can boom operating profits by way of growing revenue. An enterprise that generates sales with an excessive gross margin and occasional variable charges has high operating leverage.
Generally speaking, high operating leverage is better than low operating leverage, because it permits groups to earn large profits on each incremental sale. Having said that, groups with a low degree of operating leverage may also discover it simpler to earn a profit when dealing with a decreased level of income.
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The US economy will face economic contraction if a series of events results in decrease of investment in the economy.
When domestic output, such as GDP, falls, there is an economic contraction. It has a negative impact on other areas such as individual income, production, and sales. The unemployment rate may rise. A loss of confidence slows demand, causing an economic contraction. It is triggered by an event, such as a stock market correction or crash. The true cause, however, precedes the widely publicized event. It could be caused, for example, by an increase in interest rates, which reduces capital spending.
Investors sell stocks, driving down prices and reducing funding for large corporations leading to stock market crash. Businesses reduce spending and then lay off employees. This reduces consumer spending, resulting in additional business losses and layoffs.
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Answer:
d. profit-oriented
Explanation:
Based on the information being provided it seems that Diffusion Research Company has a profit-oriented pricing objective. This refers to a pricing approach whose main focus is maximizing profits. This is done by by adjusting prices based on costs of the products sold or pricing a product competitively in order to increase the amount of sales and thus maximize profits.