Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning...
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Accounting
Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next months budget appear below:
Selling price per unit
$
29
Variable expense per unit
$
13
Fixed expense per month
$
13,600
Unit sales per month
1,000
Required:
1. What is the companys margin of safety? (Do not round intermediate calculations.)
2. What is the companys margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).)
.
Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows:
Amount
Percent of Sales
Sales
$
122,000
100
%
Variable expenses
48,800
40
%
Contribution margin
73,200
60
%
Fixed expenses
18,000
Net operating income
$
55,200
Required:
1. What is the companys degree of operating leverage?
2. Using the degree of operating leverage, estimate the impact on net operating income of a 19% increase in sales.
3. Construct a new contribution format income statement for the company assuming a 19% increase in sales.
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