f a firm's operating and financial leverage are such that a 10
percent change in sales...
f a firm's operating and financial leverage are such that a 10
percent change in sales revenue produced a 20 percent change in
EBIT, and a 10 percent change in EBIT led to a 20 percent change in
earnings per share, what percentage change in earnings would you
expect should revenues decline by 25 percent?
If sales revenues will decline by 25 percent, what percentage
change in earnings would you expect? (
Oslo Company prepared the
following contribution format income statement based on a sales
volume of 1,000...
Oslo Company prepared the
following contribution format income statement based on a sales
volume of 1,000 units (the relevant range of production is 500
units to 1,500 units):
Sales
$
20,300
Variable
expenses
12,100
Contribution
margin
8,200
Fixed
expenses
6,232
Net operating
income
$
1,968
1) If
sales decline to 900 units, what would be the net operating income?
(Do not round intermediate
calculations.)
2)
If the selling price increases by $2.10 per unit...
The Alexander Company reported the following income statement
for 2016:
Sales $15,000,000
Less: Operating expenses
Wages,...
The Alexander Company reported the following income statement
for 2016:
Sales $15,000,000
Less: Operating expenses
Wages, salaries, benefits $6,000,000
Raw materials 3,000,000
Depreciation 1,500,000
General, selling, and administrative expenses 1,500,000
Total operating expenses 12,000,000
Earnings before interest and taxes (EBIT) $3,000,000
Less: Interest expense 750,000
Earnings before taxes $2,250,000
Less: Income taxes 1,000,000
Earnings after taxes $1,250,000
Less: Preferred dividends 250,000
Earnings available to common stockholders $1,000,000
Earnings per share—250,000 shares outstanding $4.00
Assume that all depreciation and 75 percent...
Oslo Company prepared the following contribution format income
statement based on a sales volume of 1,000...
Oslo Company prepared the following contribution format income
statement based on a sales volume of 1,000 units (the relevant
range of production is 500 units to 1,500 units):
Sales
$
22,700
Variable
expenses
12,900
Contribution
margin
9,800
Fixed expenses
8,232
Net operating
income
$
1,568
13.
Using the degree of operating leverage, what is the estimated
percent increase in net operating income of a 5% increase in sales?
Do not round intermediate calculations. Round your...
Oslo Company prepared the following contribution format income
statement based on a sales volume of 1,000...
Oslo Company prepared the following contribution format income
statement based on a sales volume of 1,000 units (the relevant
range of production is 500 units to 1,500 units): Sales $ 24,200
Variable expenses 13,400 Contribution margin 10,800 Fixed expenses
7,668 Net operating income $ 3,132 1. What is the margin of safety
in dollars? (Do not round intermediate calculations.) 2. What is
the margin of safety percentage? (Round your final answers to the
nearest whole percentage (i.e, .12 should be...
INCOME STATEMENT
Edmonds Industries is forecasting the following income
statement:
Sales
$9,000,000
Operating costs excluding
depreciation...
INCOME STATEMENT
Edmonds Industries is forecasting the following income
statement:
Sales
$9,000,000
Operating costs excluding
depreciation & amortization
4,950,000
EBITDA
$4,050,000
Depreciation and amortization
900,000
EBIT
$3,150,000
Interest
720,000
EBT
$2,430,000
Taxes (40%)
972,000
Net income
$1,458,000
The CEO would like to see higher sales and a forecasted net
income of $2,551,500. Assume that operating costs (excluding
depreciation and amortization) are 55% of sales and that
depreciation and amortization and interest expenses will increase
by 15%. The tax rate, which...
Oslo Company prepared
the following contribution format income statement based on a sales
volume of 1,000...
Oslo Company prepared
the following contribution format income statement based on a sales
volume of 1,000 units (the relevant range of production is 500
units to 1,500 units): Required (Answer each question independently
and always refer to the original data unless instructed
otherwise.)
Sales $ 22,100
Variable expenses
12,700
Contribution margin
9,400
Fixed expenses
7,708
Net operating income $
1,692
7.If the variable cost per unit increases by $.80, spending on
advertising increases by $1,300, and unit sales increase by...