OL, Inc., has sales of $500,000, Net Income of $150,000 and Operating Leverage of 2.00. If...
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OL, Inc., has sales of $500,000, Net Income of $150,000 and Operating Leverage of 2.00. If sales decrease by 30%, what would Net Income be [in dollars)? OL, Inc., has sales of $500,000, Net Income of $150,000 and Operating Leverage of 2.00. If sales increase by 10%, by what percentage would you expect Net Income to increase? Calculate the Operating Leverage for each of the Companies below: Operating Leverage Sales Account Variable Costs Contribution Margin Fixed Costs Net Incorne Operating Leverage Company C 500.000 300.000 200.000 100,000 100.000 Company D 300.000 100.000 200.000 150,000 50,000 Company E 800.000 400.000 400.000 150,000 250,000 OL, Inc., has sales of $500,000, Net Income of $150,000 and Operating Leverage of 2.00. If sales decrease by 30%, what would Net Income be [in dollars)? OL, Inc., has sales of $500,000, Net Income of $150,000 and Operating Leverage of 2.00. If sales increase by 10%, by what percentage would you expect Net Income to increase? Calculate the Operating Leverage for each of the Companies below: Operating Leverage Sales Account Variable Costs Contribution Margin Fixed Costs Net Incorne Operating Leverage Company C 500.000 300.000 200.000 100,000 100.000 Company D 300.000 100.000 200.000 150,000 50,000 Company E 800.000 400.000 400.000 150,000 250,000
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To calculate the net income after a 30 decrease in sales we can use the concept of operating leverage Operating leverage is the measure of how sensiti... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
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