Suppose Kay sells 1,000 posters. Use the data from S4-13 to compute her operating leverage factor. If
Question:
Suppose Kay sells 1,000 posters. Use the data from S4-13 to compute her operating leverage factor. If sales volume increases 10%, by what percentage will her operating income change? Prove your answer.
Data in S4-13
Kay has an e-tail poster business. Suppose Kay expects to sell 1,000 posters. Her average sales price per poster is $30 and her average cost per poster is $24. Her fixed expenses total $3,600. Compute her margin of safety .
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Step by Step Answer:
To compute Kays operating leverage factor we can use the formula Operating Leverage Factor Contribut...View the full answer
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John Kimani
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ISBN: 9780135443446
4th Canadian Edition
Authors: Karen Braun, Wendy Tietz, Louis Beaubien
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