E7-29, 33 &amp; 35 and P7-41&Acirc;&nbsp;&amp; 56(answers)

# E7-29, 33 &amp; 35 and...

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HOMEWORK CHAPTER 7B 00bd94f9ab48a85b9ff798b0566d2cfc4baf13d7.xls PAGE 1 OF 2 E7-29 1 A B Contribution margin 40,000 70,000 Divide by: Operating income 25,000 30,000 Operating leverage 1.60 2.33 2 % Sales increase 10% 10% Times: Operating leverage 1.60 2.33 % Operating income increase 16.0% 23.3% Yes, the results were as expected. Company B is more highly leveraged and will experience a higher change in Operating income given some change in sales. E7-33 1 Y = (F + N) / CM% Y = (105,000 + 0) / (227,500 / 650,000) Y = 300,000 MOS = Planned sales - Breakeven sales MOS = 650,000 - 300,000 MOS = 350,000 MOS% = MOS / Planned sales MOS% = 350,000 / 650,000 MOS% = .5385 => 53.85% 2 MOS = Planned sales - Breakeven sales MOS = 500,000 - 300,000 MOS = 200,000 Y = (F + N) / CM% 500,000 = (105,000 + N) / (227,500 / 650,000) 175,000 = 105,000 + N N = 70,000 E7-35 Brighter Smarter WACM Sales volume (units) 200 300 Sales mix 40% 60% Sales price 750 1,000 Variable cost 225 450 Contribution margin

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## This homework help was uploaded on 04/18/2008 for the course ACCTG 250 taught by Professor Rabe during the Spring '08 term at Luther.

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E7-29, 33 &amp; 35 and...

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