Compute the company degree of operating leverage

Assignment Help Accounting Basics
Reference no: EM131816025

Question - Eneliko Company installs home theater systems. The company's most recent monthly contribution format income statement appears below:

Amount Percent of Sales

Sales $ 120,000 100%

Variable expenses 84,000 70%

Contribution margin 36,000 30%

Fixed expenses 24,000

Net operating income $ 12,000

Required:

1. Compute the company's degree of operating leverage.

2. Using the degree of operating leverage, estimate the impact on net operating income of a 10% increase in sales.

3. Complete the new contribution format income statement for the company assuming a 10% increase in sales.

Reference no: EM131816025

Questions Cloud

What are the jnc stages of htn : What are pertinent assessments for a client with HTN? What patient teaching should be provided to a client taking a beta blocker?
Companies financial performance bottom line : How will such a situation impact a companies financial performance bottom line?
Conclusion regarding the research hypothesis : What is your conclusion regarding the research hypothesis? How do the results differ, and why?
What share price would you expect after the announcement : What share price would you expect after the announcement. Is the expansion a good investment?
Compute the company degree of operating leverage : Eneliko Company installs home theater systems. Compute the company's degree of operating leverage
How much would the hotel annual profit increase : How much would the hotel's annual profit increase if occupancy rates increased by 5% during the off-season (that is, from 70% to 75% in each of the months.
Plans the repurchases : plans the repurchases-it will stop repurchasing and will issue dividends totaling $ 24.1 million in four years. what is its price per share? today?
What was the purpose of the wagner act : What is a yellow dog contract as described in the Norris-LaGuardia Act of 1932? What was the purpose of the Wagner act of 1935?
Effect size were not meaningful : What would it mean if a difference were statistically significant and the effect size were not meaningful?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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