Engberg Company Installs lawn sod in home yards. The company's most recent monthly contribution format Income...
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Engberg Company Installs lawn sod in home yards. The company's most recent monthly contribution format Income statement follows: Percent of Sales Amount Sales 100% $ 124,000 49,600 Variable expenses 48 60% Contribution margin 74,400 Fixed expenses 25,000 $ 49,400 Net operating income 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 21% Increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 21% Increase in unit sales. Engberg Company Installs lawn sod in home yards. The company's most recent monthly contribution format Income statement follows: Percent of Sales Amount Sales 100% $ 124,000 49,600 Variable expenses 48 60% Contribution margin 74,400 Fixed expenses 25,000 $ 49,400 Net operating income 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 21% Increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 21% Increase in unit sales.
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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