Questions: 1. Alpha Corporation reported the following data for its most recent year: sales, $610,000; variable expenses, $305,000; and fixed expenses, $244,000. The company's degree of operating leverage is:
rev: 02_03_2015_QC_CS-6368
a.1
b. 5
c. 2.0
d. 10
2. Sperberg Corporation's operating leverage is 4.1. If the company's sales increase by 13%, its net operating income should increase by about:
a. 13.0%
b. 3.2%
c. 53.3%
d. 38.7%
3. Minist Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $38,500. If fixed expenses totaled $74,000 for the year, the break-even point in unit sales was:
a. 11,250
b. 13,175
c. 5,625
d. 7,400
4. Mounts Corporation produces and sells two products. In the most recent month, Product I05L had sales of $40,000 and variable expenses of $11,680. Product P42T had sales of $53,000 and variable expenses of $16,220. The fixed expenses of the entire company were $46,150. The break-even point for the entire company is closest to: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
a. $74,050
b. $65,889
c. $46,150
d. $65,929
5. Puchalla Corporation sells a product for $130 per unit. The product's current sales are 12,400 units and its break-even sales are 11,036 units. The margin of safety as a percentage of sales is closest to:
a. 88%
b. 12%
c. 11%
d. 89%