Calculate abc company degree of operating leverage

Assignment Help Accounting Basics
Reference no: EM133189063

Question - ABC Company manufactures computer monitors. Following is a summary of its basic cost and revenue data:

 

Per Unit

Percent

Sales price

$ 580

100

Variable costs

348

60

contribution margin

$ 232

40

Assume that ABC Company is currently selling 700 computer monitors per month. Fixed costs are expected to be $96,000.

Required -

1. Calculate ABC Company's degree of operating leverage (DOL) if 700 units are sold.

2. Define what is meant by the DOL.

3. Of what purpose/value is the DOL to decision makers?

Reference no: EM133189063

Questions Cloud

Design a checklist for beer trends and wine trends : Design a checklist for Beer trends and Wine trends, Make suggestions of items that can be incorporated in the menu or items that can be replaced
Calculate the yield on the repo if it has a six-day maturity : Treasury securities from a correspondent bank at a price of $29,950,000, Calculate the yield on the repo if it has a six-day maturity
Determine the company working capital equals : Ariel Corporation reports the following year-end balance sheet data. Determine the company working capital equals
Write open system mass and energy balance equations : Write open system mass (steady-state) and energy (rate form) balance equations and Relate terms in energy balance equation to unknown lake temperature
Calculate abc company degree of operating leverage : Assume that ABC Company is currently selling 700 computer monitors per month. Calculate ABC Company degree of operating leverage
Why preventive health services were now covered : Why preventive health services were now covered, Should this be just an insurance scheme or must it also have a health care system attached to it,Why
Discuss the motivations for consolidation : Discuss the motivations for consolidation. Why is consolidation required of some business entities and not for others
What is the maximum number of shares : If LG wishes to finance the acquisition with shares in the merged company. What is the maximum number of shares it would be willing to offer to Sony shareholder
Discuss mission, vision, objectives and policies of tesla : Strategic Posture, It must include current mission, vision, objectives, and policies of the organization, External Environment

Reviews

Write a Review

Accounting Basics Questions & Answers

  Nick and jolene are married nick is 64 and retired last

nick and jolene are married. nick is 64 and retired last year from his job with amalgamated company.jolene is 56 and

  Compute departmental operating income for each department

The sales, cost of goods sold, and total operating expenses of departments A and B - Compute the departmental operating income for each department

  Calculate the direct labour rate and efficiency variances

Each unit of product requires 15 minutes of labour time and each labour hour, Calculate the direct labour rate and efficiency variances.

  Prepare an analysis of the composition of return

Prepare an analysis of the composition of return on common equity describing the advantage or disadvantage accruing to common shareholders

  How much Australian dollar the exporter will make a loss

The exporter wants to sell INR4 million in the one- year forward contract. How much Australian dollar the exporter will make a loss after one year

  Describe the three products of accounting

Describe the three products of accounting and bookkeeping procedures that are most useful in personal financial planning

  To assist in the preparation of a cash budget

Ryan Richards, controller for Grange Retailers, has assembled the following data to assist in the preparation of a cash budget for the third quarter of 2008:

  Determine the adjusted balances of accounts receivable

Question - At the end of the current year, Accounts Receivable has a balance of $785,000; Determine the adjusted balances of Accounts Receivable

  Which of these costs are deductible

Legal fees of $600 to collect unpaid rent. Which of these costs are deductible? If a cost is deductible, is it deductible for AGI or from AGI

  Prepare an income statement for the year ended december

Prepare an income statement for the year ended December 31, 2009. (Assume that 11,000 shares of stock are outstanding.)

  Accrual verses cash flow

The Water Fun Store is a retailer of water sports products forbackyard swimming pools. During August, the firm had the following operating activities:

  What is common stock value

Another common share of similar risk has a 12% required annual rate of return or discounted rate. What is common stock value (VS)

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd