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problem: Understanding effects of operating leverage High Tech, Company, & Old time Company compete within the same industry and had the following operating results in 2008:

 

High Tech

Old-time

Sales

$2,100,000

$2,100,000

Variable expenses

420,000

1,260,000

Contribution Margin

$1,680,000

$840,000

Fixed expenses

1,470,000

630,000

Operating income

$210,000

$210,000

Required:                                                                                                        
[1] Using the amounts find outd in requirement C) above, compute increase or decrease in the amount of operating income expected in 2009 from the amount reported in 2008.

 

High Tech

Old-time

1. Operating income reported in 2008 

 

 

Expected operating income - 20 percent sales increase

 

 

Expected increase in operating income   

 

 

 

2. Operating income reported in 2008 

 

 

Expected operating income - 20 percent sales decrease

 

 

Expected decrease in operating income 

   

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M922478

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