The Kolby and Kent companies both increased sales by 30% this year when compared with last years
Question:
The Kolby and Kent companies both increased sales by 30% this year when compared with last year’s results. Kolby’s net income increased 40% as a result of the increased sales. Kent’s net income increased 20%. Explain why differences in operating leverage may have resulted in a higher increase in net income for Kolby than for Kent. Provide a diagram to illustrate your explanation.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 57% (14 reviews)
Operating leverage can be measured as the percentage of a companys total costs accounted for by fixe...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Financial Accounting Information For Decisions
ISBN: 978-0324672701
6th Edition
Authors: Robert w Ingram, Thomas L Albright
Question Posted:
Students also viewed these Accounting questions
-
Explain why some hedge funds failed as a result of the credit crisis.
-
What is the difference between performance and organizational citizenship behaviors? How would you increase someones performance? How would you increase citizenship behaviors? Are citizenship...
-
As a result of increased tensions in the Middle East, oil production is down by 1.21 million barrels per daya 5 percent reduction in the worlds supply of crude oil. Explain the likely impact of this...
-
1. What is the present value (PV") of an offer of $15,000 two years from now if the Opportunity Cost of Capital (OCC) is $12% per annum? 2. What is the PV of an offer to receive $12,000 three years...
-
Janet Enterprises incorporated on May 3, 2015. The company engaged in the following transactions during its first month of operations: May 3 Issued capital stock in exchange for $950,000 cash. May 4...
-
The geometric mean of two positive numbers a and b is the number ab. Show that the value of c in the conclusion of the Mean Value Theorem for (x) = 1/x on an interval of positive numbers [a, b] is c...
-
Traffic shaping creates two tiers of traffic. What are those tiers? Give an example of each type of traffic.
-
If the Albany highway system described in Problem 29 has revised flow capacities as shown in the following network, what is the maximal flow in vehicles per hour through the system? How many vehicles...
-
Antique Dealer has a mint condition, in-the-box, never opened Stinky Pete the Prospector doll from the popular 1950s television show, Woody's Roundup . Collector, who is a big fan of the show,...
-
Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a...
-
Sanders Company recorded sales revenues of $10 million for the year just ended. It recorded expenses totaling $9 million. Of these expenses, $4 million were expenses that would not have been...
-
Given below is selected information about two companies. a. Calculate net income for each company. b. What is operating leverage? Is it present in the operations of these two companies? If so, which...
-
Repeat Prob. 14??34 for a pipe of inner radius 7 cm. Repeat Prob. The velocity profile in fully developed laminar flow in a circular pipe of inner radius R = 2 cm, in m/s, is given by u(r) = 4(1 - r...
-
Consider the Black -Scholes model (SS)[0,71 and let 0 < To 0 is a fixed strike. What is the limit for large N? (ii) Use the distribution from (i) and the Black -Scholes formula to compute the price...
-
USE THE DATA IN THE TABLE BELOW TO ANSWER THE FOLLOWING 3 QUESTIONS NikoJokic, Inc. Balance Sheets for the Years Ending December 31, (All amounts are in dollars) Cash Accounts receivable Inventory...
-
Estimate the income elasticity of revenue for the motor vehicle fuel tax and evaluate the long run growth potential of the tax. Examine the years when the motor vehicle fuel tax rate was increased...
-
How much debt does the issuer have? Has the debt level changed over the past three years? Can the increase/decrease in debt level affect their credit rating? Provide a graph that shows the debt level...
-
Your supervisor has tasked you with evaluating several loans related to a new expansion project. Using the PVIFA table (table 9.4 in the textbook), determine the annual payment on a $179,000, 6%...
-
Which of the following is not a type of responsibility center? a. Cost center b. Revenue center c. Access center d. Profit center
-
B.) What is the approximate concentration of free Zn 2+ ion at equilibrium when 1.0010 -2 mol zinc nitrate is added to 1.00 L of a solution that is 1.080 M in OH - . For [Zn(OH) 4 ] 2- , K f = 4.610...
-
Consider the robot arm system of Fig. P4.3-8. Let T = 0.1 s . (a) Find the system transfer function a (z) M(z). (b) Draw a discrete simulation diagram, using the results of part (a), and give the...
-
The following item appears in the current liabilities section of Carnival Cruise Corporations balance sheet at November 30, 2008: Customer deposits $2,519 million In addition, Note 2 to the financial...
-
Shelia Young started a real estate business at the beginning of January. After approval by the state for a charter to incorporate, she issued 1,000 shares of stock to herself and deposited $20,000 in...
-
Shelia Young started a real estate business at the beginning of January. After approval by the state for a charter to incorporate, she issued 1,000 shares of stock to herself and deposited $20,000 in...
-
A manufacturer reports finished goods inventory of $820 on June 1 and $1,130 on June 30. Cost of goods manufactured for June is $5,460. What is cost of goods sold for June? Cost of Goods Sold Cost of...
-
Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account balances were as...
-
MyBnB started a home rental company on January 1. As of November 30, MyBnB reported the following balances. The company does not yet have a balance in Retained Earnings because this is its first year...
Study smarter with the SolutionInn App