Solved: Change in proportion to the revenue change, Accounting Basics

+44 141 628 6080
[email protected]

Change in proportion to the revenue change

Problem: A 10% change in a firm's revenues is likely to result in a change of more than 10% in the firm's operating income because:

1) not all of the firm's costs will change in proportion to the revenue change.

2) the firm has financial leverage.

3) the contribution margin ratio will change in proportion to the revenue change.

4) only fixed expenses will change in proportion to the revenue change.

Solution Preview :

Prepared by a verified Expert

Accounting Basics: Change in proportion to the revenue change

Reference No:- TGS01619634

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Accounting Basics

Q : Difference between tax refund and a tax benefit

Problem 1: How would you describe the difference between a tax refund and a tax benefit?

Q : Depreciation-depletion and amortization expense

You just got hired as an adjunct professor for a local university. You are teaching introductory accounting and just beginning a chapter on depreciation. A student asks, "Why is it necessary to have depreciation, depletion, and amortization expens

Q : Acceptable transfer price from the perspective of division

There would be no cost saving from transferring the units within the company rather than selling them on the outside market. What should the lowest acceptable transfer price from the perspective of division X?

Q : Products producing from a single raw material input

Products A, B, and C are produced from a single raw material input. The Raw material costs $90,000 from which 5,000 units of A, 10,000 units from B, and 15,000 units of C can be produced each period.

Q : Change in proportion to the revenue change

Q : Another term for mixed costs

Problem: Which of the following is another term for mixed costs?

Q : Computing the cash payback period

Bella Company is considering purchasing new equipment for $450,000. It is expected that the equipment will produce net annual cash flows of $50,000 over its 10-year useful life. Annual dpreciation will be $45,000. Compute the cash payback period.

Q : Conflicts of interest in the accounting profession

Colin Boyd, "The Structural Origins of Conflicts of Interest in the Accounting Profession" details the events that led to the collapse of Enron and scandals at other companies.

Q : Cost of the competing patent

To protect its patent, the corporation purchased on January 1, 2008 a patent on a competing product which was originally issued on January 1, 2004. Because of its unique plant, Santo Corporation does not feel the competing patent can be used in pr

1930391

Questions
Asked

3,689

Active Tutors

1445193

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Solution Preview :

Prepared by a verified Expert

Accounting Basics: Change in proportion to the revenue change

Reference No:- TGS01619634

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Difference between tax refund and a tax benefit

Q : Depreciation-depletion and amortization expense

Q : Acceptable transfer price from the perspective of division

Q : Products producing from a single raw material input

Q : Change in proportion to the revenue change

Q : Another term for mixed costs

Q : Computing the cash payback period

Q : Conflicts of interest in the accounting profession

Q : Cost of the competing patent

How ensure that the youth understand what study involves

How do you define being an adult

Why you feel unpleasantly hot and sweaty

Review a social, behavioral, or cultural factor

Examine historical literature to the most current period

Is early food experiences can impact development

Problem concerning consensual sexual relationship

Solution Preview :

Prepared by a verified Expert

Accounting Basics: Change in proportion to the revenue change

Reference No:- TGS01619634

Recent Questions Asked Accounting Basics

Q : Difference between tax refund and a tax benefit

Q : Depreciation-depletion and amortization expense

Q : Acceptable transfer price from the perspective of division

Q : Products producing from a single raw material input

Q : Change in proportion to the revenue change

Q : Another term for mixed costs

Q : Computing the cash payback period

Q : Conflicts of interest in the accounting profession

Q : Cost of the competing patent

Asked Questions