Assume the following: Company B's Sources of Capital: See table for Company B's operating profit performance for the year. The business paid $480,000 interest for the year. Calculate its financial leverage gain (or loss) for the year.
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Company B
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Company C
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Totals
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Per Unit
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Totals
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Per Unit
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Sales volume, in units
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50,000
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1,500,000
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Sales revenue
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$15,000,000
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$300.00
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$36,000,000
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$24.00
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Cost of goods sold expense
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$7,500,000
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$150.00
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$27,000,000
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$18.00
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Gross margin
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$7,500,000
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$150.00
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$9,000,000
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$6.00
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Variable operating expenses
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$3,750,000
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$75.00
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$4,200,000
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$2.80
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Contribution margin
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$3,750,000
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$75.00
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$4,800,000
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$3.20
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Fixed operating expenses
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$1,950,000
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$39.00
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$3,000,000
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$2.00
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Operating profit
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$1,800,000
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$36.00
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$1,800,000
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$1.20
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