Question

The degree of operating leverage can be calculated as:

.

Closser Corporation produces and sells two products. In the most recent month, Product M50S had sales of $39,000 and variable expenses of $12,870. Product H50G had sales of $12,000 and variable expenses of $4,980. The fixed expenses of the entire company were $33,050. The break-even point for the entire company is closest to:

$ 33,050 |

$ 50,900 |

$ 17,950 |

$ 50,846 |

Answer #1

Contribution = Sales – Variable costs

Calculations | A | B | C = A + B |

Particulars | Product M50S | Product H50G | Total |

Sales | 39000 | 12000 | 51000 |

Variable expenses | 12870 | 4980 | 17850 |

Contribution | 26130 | 7020 | 33150 |

Contribution margin ratio for the entire company

= Total Contribution / Total Sales

= $33,150 / $51,000

= 0.65 or 65%

So, Break even point (Sales)

= Fixed costs / Contribution margin ratio

= $33,050 / 0.65

= $ 50,846

So, as per above calculations, option D is the correct option

Closser Corporation produces and sells two products. In the most
recent month, Product M50S had sales of $34,000 and variable
expenses of $11,080. Product H50G had sales of $47,000 and variable
expenses of $18,080. The fixed expenses of the entire company were
$46,090. The break-even point for the entire company is closest
to:

Newham Corporation produces and sells two products. In the most
recent month, Product R10L had sales of $21,000 and variable
expenses of $10,050. Product X96N had sales of $34,000 and variable
expenses of $16,900. The fixed expenses of the entire company were
$45,960. The break-even point for the entire company is closest to:
Multiple Choice $90,118 $28,050 $45,960 $72,910

Ingrum Corporation produces and sells two products. In the most
recent month, Product R38T had sales of $20,000 and variable
expenses of $7,400. Product X08S had sales of $39,000 and variable
expenses of $6,170. The fixed expenses of the entire company were
$41,160.
If the sales mix were to shift toward Product R38T with total
sales remaining constant, the overall break-even point for the
entire company:

Flesch Corporation produces and sells two products. In the most
recent month, Product C90B had sales of $25,420 and variable
expenses of $7,626. Product Y45E had sales of $30,030 and variable
expenses of $18,018. The fixed expenses of the entire company were
$19,000. If the sales mix were to shift toward Product C90B with
total dollar sales remaining constant, the overall break-even point
for the entire company

Mcdale Inc. produces and sells two products. Data concerning
those products for the most recent month appear below:
Product I49V
Product Z50U
Sales
$
32,000
$
37,000
Variable expenses
$
12,000
$
27,330
The fixed expenses of the entire company were $39,140. The
break-even point for the entire company is closest to:
Multiple Choice
$78,470
$91,023
$39,140
$46,260

Flesch Corporation produces and sells two products. In the most
recent month, Product C90B had sales of $31,590 and variable
expenses of $9,477. Product Y45E had sales of $19,550 and variable
expenses of $8,798. The fixed expenses of the entire company were
$18,000. If the sales mix were to shift toward Product C90B with
total dollar sales remaining constant, the overall break-even point
for the entire company:
Multiple Choice
would decrease.
would increase.
could increase or decrease.
would not change.

9. Wimpy Inc. produces and sells a single product. The selling
price of the product is $190.00 per unit and its variable cost is
$60.80 per unit. The fixed expense is $394,128 per month. The
break-even in monthly dollar sales is closest to: (Round your
intermediate calculations to 2 decimal places.)
Multiple Choice
$1,231,650
$837,522
$579,600
$394,128
10. Majid Corporation sells a product for $180 per unit. The
product's current sales are 42,000 units and its break-even sales
are 34,410...

Multiple Products, Break-Even Analysis, Operating
Leverage
Carlyle Lighting Products produces two different types of lamps:
a floor lamp and a desk lamp.
Floor lamps sell for $30 and desk lamps sell for $20.
The projected income statement for the upcoming year
follows:
Sales
$600,000
Less: Variable
costs
400,000
Contribution
margin
200,000
Less: Fixed
costs
150,000
Operating
income
$50,000
The owner of Carlyle’s estimates that 60 percent of the sales
revenues will be produced by floor lamps and the...

Margin of Safety and Operating Leverage
Medina Company produces a single product. The projected income
statement for the coming year is as follows:
Sales (60,000 units @ $23.00)
$1,380,000
Total variable cost
372,600
Contribution
margin
$ 1,007,400
Total fixed cost
973,820
Operating income
$ 33,580
Required:
1. Compute the break-even sales dollars.
$
2. Compute the margin of safety in sales
dollars.
$
3. Compute the degree of operating
leverage.
4. Compute the new operating income if sales
are 20%...

Lincoln Corporation produces and sells two produtcs : Standard
and Deluxe. The info on the two products sold for the last month is
given below. The common fixed cost is $15,000. Standard : Sales :
$45,000 Variable Expenses : $36,000 Deluxe : Sales : $33,000
Variable Expenses : $16,500 Suppose total sales reveue for the
coming month stays the same, but the sales (revenue) mix changes
such that Deluxe increases by 20% (i.e. additional 20% to current
%) and Standard...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 13 minutes ago

asked 19 minutes ago

asked 24 minutes ago

asked 25 minutes ago

asked 38 minutes ago

asked 40 minutes ago

asked 40 minutes ago

asked 40 minutes ago

asked 42 minutes ago

asked 44 minutes ago

asked 55 minutes ago