Sharon sells authentic Amish quilts on her website. Suppose Sharon expects to sell 2,400 quilts during...

 

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Sharon sells authentic Amish quilts on her website. Suppose Sharon expects to sell 2,400 quilts during the coming year. Her average. sales price per quilt is $225, and her average cost per quilt is $100. Her fixed expenses total $180,000. Compute Sharon's operating leverage factor at an expected sales level of 2,400 quilts. If sales volume increases 14%, by what percentage will her operating income change? Prove your answer by calculating operating income at a sales volume of 2,400 and at a sales volume of 2,736. Compute her operating leverage factor. (Round your answer to two decimal places.) First, identify the formula, then compute the operating leverage factor. Operating leverage factor If sales volume increases 14%, by what percentage will her operating income change? (Round the percentage to the nearest tenth percent, XX%.) Operating income will increase by %. Prove your answer. (Round the percentage to the nearest tenth percent, X.X%.) Original volume (quilts) Add: Increase in volume New volume (quilts) Multiplied by: Unit contribution margin New total contribution margin Less: Fixed expenses New operating income Less: Operating income before change in volume Increase in operating income Percentage change Sharon sells authentic Amish quilts on her website. Suppose Sharon expects to sell 2,400 quilts during the coming year. Her average. sales price per quilt is $225, and her average cost per quilt is $100. Her fixed expenses total $180,000. Compute Sharon's operating leverage factor at an expected sales level of 2,400 quilts. If sales volume increases 14%, by what percentage will her operating income change? Prove your answer by calculating operating income at a sales volume of 2,400 and at a sales volume of 2,736. Compute her operating leverage factor. (Round your answer to two decimal places.) First, identify the formula, then compute the operating leverage factor. Operating leverage factor If sales volume increases 14%, by what percentage will her operating income change? (Round the percentage to the nearest tenth percent, XX%.) Operating income will increase by %. Prove your answer. (Round the percentage to the nearest tenth percent, X.X%.) Original volume (quilts) Add: Increase in volume New volume (quilts) Multiplied by: Unit contribution margin New total contribution margin Less: Fixed expenses New operating income Less: Operating income before change in volume Increase in operating income Percentage change

Answer rating: 100% (QA)

ANSWER Solution 1Contribution MarginNet income Operating Leverage 300000120000 25 2Operat... View the full answer