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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:
 
  Amount Percent of Sales
Sales $127,000 100%
Variable expenses 50,000 40%
Contribution margin 76,200 60%
Fixed expenses 18,000  
Net operating income $58,200  
 
Required:
1. What is the company's degree of operating leverage?
2. Using the degree of operating leverage, estimate the impact on net operating income of a 26% increase in unit sales.
3. Construct a new contribution format income statement for the company assuming a 26% increase in unit sales.
 
Complete this question by entering your answers in the tabs below.
Required 1
What is the company's degree of operating leverage? (Round your answer to 2 decimal places.)
Degree of operating leverage ______
 
Required 2
Using the degree of operating leverage, estimate the impact on net operating income of a 26% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).).
 
Net operating income  ________ by ________ %
 
Required 3
Construct a new contribution format income statement for the company assuming a 26%  increase in unit sales. 
 
Engberg Company
 Contribution Income Statement
      Amount       Percent of Sales 
      %
      %
      %
       
       
       
 

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Related questions

Primare Corporation has provided the following data concerning last month's manufacturing operations.
      Purchases of raw materials                                                   $ 30,000
      Indirect materials used in production                                     $ 4,790 
      Direct labor                                                                         $ 60,000 
      Manufacturing overhead applied to work in process                 $ 88,000
      Underapplied overhead                                                         $ 4,090
 
Inventories                     Beginning           Ending 
Raw materials                $ 10,300$         $ 18,900
Work in process              $ 55,500$        $ 70,000
Finished goods               $ 34,300$         $ 43,800
 
Required:
1. Prepare a schedule of çost of goods manufactured for the month.
2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.
 
Complete this question by entering your answers in the tabs below.
 
Required 1
Prepare a schedule of cost of goods manufactured for the month.
 
Primare Corporation
Schedule of Cost of Goods Manufactured
 
Primare Corporation
 Schedule of Cost of Goods Manufactured
Direct materials:      
    Beginning raw materials inventory $      10,300    
    Add: Purchases of raw materials 30,000    
    Total raw materials available  40,300    
    Less: Ending raw materials inventory 18,900    
    Raw materials used in production 21,400    
    Less: Indirect materials used in production 4,790    
Direct materials used in production   $     16,610  
Direct labor   60,000  
Manufacturing overhead    88,000  
Manufacturing overhead   164,610  
Total manufacturing costs added to production     329,220
 

Write about a business management theory that you identify with, incorporating real life examples in your answer.

please someone help its urgent.

Primare Corporation has provided the following data concerning last month's manufacturing operations.
      Purchases of raw materials                                                   $ 30,000
      Indirect materials used in production                                     $ 4,790 
      Direct labor                                                                         $ 60,000 
      Manufacturing overhead applied to work in process                 $ 88,000
      Underapplied overhead                                                         $ 4,090
 
Inventories                     Beginning           Ending 
Raw materials                $ 10,300$         $ 18,900
Work in process              $ 55,500$        $ 70,000
Finished goods               $ 34,300$         $ 43,800
 
Required:
1. Prepare a schedule of çost of goods manufactured for the month.
2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.
 
Complete this question by entering your answers in the tabs below.
 
Required 2
Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of
Goods Sold.
 
Primare Corporation 
Schedule of Cost of Goods Sold
Beginning finished goods inventory $         34,300
Add: Cost of goods manufactured 94,610
Cost of goods available for sale 128,910
Less: Ending finished goods inventory  43,800
Unadjusted cost of goods sold 85,110
Add: Underapplied overhead 4,090
 Adjusted cost of goods sold $        89,200
 
 
 
 

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