How does degree of operating leverage help managers predict changes in profit? In general, would you prefer a higher or lower degree of operating leverage?
Answer to relevant QuestionsExplain the difference between unit contribution margin and contribution margin ratio.What will happen to a company’s break-even point if the product mix shifts to favor a product with a lower contribution margin per unit?Refer to the information in M6-8 for Heather Hudson. If she sells 275 bears next month, determine the margin of safety in units, sales dollars, and as a percentage of sales.Selling price per bear ....... $35.00Total fixed ...Laguna Print makes advertising hangers that are placed on doorknobs. It charges $0.04 and estimates its variable cost to be $0.01 per hanger. Laguna’s total fixed cost is $4,500 per month, which consists primarily of ...Refer to the information for Cove’s Cakes in E6-3.Price per cake ....... $17.00 Variable cost per cakeIngredients ........ 2.50Direct labor ....... 1.40Overhead (box, etc.) ..... ...
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