Estimate the impact on net operating income

Assignment Help Accounting Basics
Reference no: EM132713377

Problem - Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:

 

Amount

Percent of Sales

Sales

$126,000

100%

Variable expenses

50,400

40%

Contribution margin

75,600

60%

Fixed expenses

22,000

 

Net operating income

$53,600

 

Required -

1. What is the company's degree of operating leverage?

2. Using the degree of operating leverage, estimate the impact on net operating income of a 29% increase in unit sales.

3. Construct a new contribution format income statement for the company assuming a 29% increase in unit sales.

Reference no: EM132713377

Questions Cloud

Prepare a classified balance sheet at May : Ordered computer equipment costing $18,000. Prepare a classified balance sheet at May 31. Include retained earnings with a balance of zero
How much is Charlotte moving expense adjustment : The new home is 800 miles away from her previous home. She paid $5,000 for moving costs. How much is Charlotte moving expense adjustment
Prepare all the liquidation entries necessary to close books : The noncash assets are sold for $34,000 and all liabilities duly paid off. Prepare all the liquidation entries necessary to close the books of accounts
What is the company margin of safety : Molander Corporation is a distributor of a sun umbrella used at resort hotels. Variable expense per unit $13. What is the company's margin of safety
Estimate the impact on net operating income : Engberg Company installs lawn sod in home yards. Using the degree of operating leverage, estimate impact on net operating income of a 29% increase in unit sales
Determine the December consolidated totals : The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. Determine the December consolidated totals
View of police-minority relations : What is your view of the current state of police-minority relations? Why do you have this view, please provide examples?
About the rules surrounding search and seizure : Explain when arrest warrants are required. Likewise, explain when search warrants are required.
Is home confinement with electronic monitoring deterrent : Is home confinement with electronic monitoring a deterrent? Are there negatives to being confined to one's home? What type of person should be on home confineme

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