ezto.mheducation.com Chapter 5 Homework Chapter 5 Homework Chapter 5 Homework Ch

Question

ezto.mheducation.com Chapter 5 Homework Chapter 5 Homework Chapter 5 Homework Chegg.com 1.96 in percent- Google Search Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent Amount of Sales 60,000 90,000 60% $150,000 Sales Variable expenses 100% 40% Contribution margin Fixed expenses 23,000 Net operating income 67.000 Required: 1. Compute the company's degree of operating leverage. (Round your answer to 2 decimal places.) gree of operating leverage 1.34 2, using the degree of operating leverage, estimate the impact on net operating income of a 27% increase in sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e.1234 should be entered as 12.34).) t operating income increases by 36.181%

Explanation / Answer

1) Degree of operating leverage contibution/net income 90,000/67000 1.34 2) Net operating income increases by 36.18% 3) Contribution income statement sales (150,000*127%) 190500 variable expense (60000*127%) 76200 Contribution margin 114300 Fixed expense 23000 Net operating income 91300

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