Business, 10.12.2019 00:31 gabi83

Friendly pie inc., income statement for 2017 is as follows: friendly pie, inc. income statement for the year ended december 31, 2017sales (160,000 units at $50) . . . . $8,000,000less: variable costs (160,000 units at $30) . 4,800,000fixed costs . . . . . . . . 1,600,000earnings before interest and taxes . . . . 1,600,000interest expense . . . . . . . . . . . 600,000earnings before taxes (ebt) . .. . . . 1,000,000income tax expense (30%) . . . . . .. 300,000earnings after taxes (eat) . . . . . . 700,000given this income statement, compute the following: a. degree of operating leverage. b. degree of financial leverage. c. degree of combined leverage. d. break even point in units and dollars.

Answers: 3

Show answers

Answers

Answer from: hanchinsko12

a. Degree of operating leverage = Sales -Variable cost

Sales - Variable cost - Fixed cost

= $8,000,000 - $4,800,000

$8,000,000 - $4,800,000 - $1,600,000

= $3,200,000

$1,600,000

= 2

b. Degree of financial leverage

= Sales -Variable cost - Fixed cost

Sales - Variable cost - Fixed cost - Interest

= $8,000,000 - $4,800,000 - $1,600,000

$8,000,000 - $4,800,000 - $1,600,000 - $600,000

= $1,600,000

$1,000,000

= 1.6

c. Degree of combined leverage

= Degree of operating leverage x Degree of financial leverage

= 2 x 1.6

= 3.2

d. Break-even point(units) = Fixed cost/Contribution per unit

= $1,600,000/$20

= 80,000 units

Contribution per unit = Selling price - Variable cost per unit

= $50 - $30

= $20

Break-even point (dollars) = Break-even point (units) x Selling price

= 80,000 units x $50

= $4,000,000

Explanation : Degree of operating leverage is equal to contribution divided by Earnings before interest and tax.

Degree of financial leverage is equal to earnings before interest and tax divided by earnings after interest

Degree of combined leverage is the product of degree of operating leverage and degree of financial leverage.

Break-even point(units) is equal to fixed cost divided by contribution per unit

Break-even point(dollars) is equal to break-even point in units multiplied by selling price.

Answer from: Quest

answer; /// i believe the correct answer to the above question is(200 pounds); /good luck

Answer from: Quest

What are the given options so i may

Another question on Business

Business, 22.06.2019 05:00

Every 10 years, the federal government sponsors a national survey of health and health practices (nhanes). one question in the survey asks participants to rate their overall health using a 5-point rating scale. what is the scale of measurement used for this question? ratio ordinal interval nominal

Answers: 1

Answer

Business, 22.06.2019 11:40

Manipulation manufacturing's (amm) standards anticipate that there will be 5 pounds of raw material used for every unit of finished goods produced. amm began the month of maymay with 8,000 pounds of raw material, purchased 25,500 pounds for $ 15,300 and ended the month with 7,400 pounds on hand. the company produced 4,9004,900 units of finished goods. the company estimates standard costs at $ 1.10 per pound. the materials price and efficiency variances for the month of maymay were:

Answers: 1

Answer

Business, 22.06.2019 12:00

Suppose there are three types of consumers who attend concerts at your university’s performing arts center: students, staff, and faculty. each of these groups has a different willingness to pay for tickets; within each group, willingness to pay is identical. there is a fixed cost of $1,000 to put on a concert, but there are essentially no variable costs. for each concert: i. there are 140 students willing to pay $20. (ii) there are 200 staff members willing to pay $35. (iii) there are 100 faculty members willing to pay $50. a) if the performing arts center can charge only one price, what price should it charge? what are profits at this price? b) if the performing arts center can price discriminate and charge two prices, one for students and another for faculty/staff, what are its profits? c) if the performing arts center can perfectly price discriminate and charge students, staff, and faculty three separate prices, what are its profits?

Answers: 1

Answer

Business, 22.06.2019 18:00

1. what is the amount of interest earned after two years on a $100 deposit paying 4 percent simple interest annually? $8.00 $4.08 $8.16 $4.00 2. what is the amount of compound interest earned after three years on a $100 deposit paying 8 percent interest annually? $24.00 $8.00 $16.64 $25.97 3. a business just took out a loan for $100,000 at 10% interest. if the business pays the loan off in three months, how much did the business pay in interest? $2,500.00 $10.00 $250.00 $10,000.00 4. what is the annual percentage yield (apy) for a deposit paying 5 percent interest with monthly compounding? 5.00% 5.12% 79.59% 0.42%

Answers: 1

Answer

You know the right answer?

Friendly pie inc., income statement for 2017 is as follows: friendly pie, inc. income statement for...

Questions