User Account

All Pages

What is the degree of operating leverage

Assignment Help Accounting Basics
Reference no: EM131809836

Arizona Beverages sells 210,000 bottles of Temple Tingler each year. The product sells for $6.50 per bottle and variable cost per unit is $2.75. Total annual fixed costs are $750,000.

Required

1. What is the degree of operating leverage? What is the break-even point in units?

2. If the company can increase unit sales by 30%, what will be the expected percentage increase in net income? What will be the expected total dollar net income?

3.Use the original data. If the company increases advertising by $22,500, sales in units will increase by 15%. What will be the new break-even point? How much will net income change?

Reference no: EM131809836

Questions Cloud

Calculate any depreciation recapture : Calculate any depreciation recapture, ordinary losses, or capital gains associated with disposal of the equipment.
Prepare the financial statement for sita ltd : Income tax of £40,000 is to be provided for the year. Prepare the following financial statement for Sita Ltd in accordance with IAS 1
Prepare the journal entries for each of given transactions : On August 1, 2016, John established John's Auto Service, Inc. Prepare the journal entries for each of these transactions.
Straight-line depreciation over the adr class : if MACRS GDS is used, and if straight-line depreciation over the ADR class life is used with a $10,000 salvage value.
What is the degree of operating leverage : What is the degree of operating leverage. What is the break-even point in units
Determining the estimated salvage value : A $150,000 asset has been depreciated with the straight-line method over an 8-year life. The estimated salvage value was $30,000.
Evaluate the proposal usaing the three basic method : A firm considering the purchase of forty year old building, the following pertinent data were provided. Evaluate the proposal usaing the 3 Basic method.
Determine the net operating income before the bonus : determine the net operating income before the bonus, What bonus amount is the president entitled to
Loss at disposal using the following depreciation methods : What is the size of the recaptured depreciation or loss at disposal using the following depreciation methods?

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.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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