Solution-Calculate the margin of safety in dollars for each

Calculate the margin of safety in dollars for each firm

Assignment Help Accounting Basics

Reference no: EM132864466

Question - Income statements for two different companies in the same industry are as follows:

	Company X	Company Y
Sales	Rs.400,000	Rs.400,000
Less: Variable costs	300,000	200,000
Contribution margin	Rs.100,000	Rs.200,000
Less: Fixed costs	50,000	150,000
Operating income	Rs. 50,000	Rs. 50,000

Required -

a. Calculate the degree of operating leverage for each firm.

b. Calculate the margin of safety in dollars for each firm.

c. Determine the net income for each firm if sales increase by 20 percent.

Reference no: EM132864466

Questions Cloud

Examples of successful scheduling : The textbook gives examples of successful scheduling. What are benefits of having a schedule for a project? What are the benefits of using time-based schedule?

Project management presentation : Create a minimum 10-slide PowerPoint Presentation on the barriers and challenges surrounding project management communication.

What is the estimated cost of missing inventory : On December 31, 2018, a physical inventory count determined that EI of $600,000 was in the warehouse. What is the estimated cost of missing inventory

Describe the global implications that status : Describe the global implications that status has for an international manager in Western culture, with two original examples.

Calculate the margin of safety in dollars for each firm : Question - Income statements for two different companies in the same industry are as follows: Calculate the margin of safety in dollars for each firm

Describe type of government and recent political development : Describe the type of government and recent political developments that could influence the economic and business environment of the country

Cost of Quality : Select two fast food restaurants and evaluate them in terms of service quality. Suggest ways to improve the service quality.

MNC Management : Identify the problems from at least two MNCs and provide your recommendations to the MNCs' management on how to control similar problems in the future.

Quality control systems : Compare and contrast ISO900:2000 and Six Sigma in terms of their differences and similarities.

User Account

All Pages

Calculate the margin of safety in dollars for each firm

Reference no: EM132864466

Reference no: EM132864466

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT