An increase in fixed operating costs will result in ________. a.) a decrease in the degree...

An increase in fixed operating costs will result in ________.

a.) a decrease in the degree of operating leverage

b.) an increase in the degree of operating leverage

c.) an increase in the degree of financial leverage

d.) a decrease in the degree of financial leverage

Expert Solution

Ans b.) an increase in the degree of operating leverage

An increase in fixed operating costs will result in an increase in the degree of operating leverage. There will be impact on operating leverage, and no impact on financial leverage.

jeff jeffy answered 1 year ago

Degree of operating leverage Grey Products has fixed operating costs of $390,000, variable operating costs of...

Degree of operating leverage Grey Products has fixed operating costs of $390,000, variable operating costs of $16.35 per unit, and a selling price of $63.44 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 9,000, 10,000, and 11,000 units, respectively. c. With 10,000 units as a base, what are the percentage changes in units sold and EBIT as sales move from the base to the other sales levels used in part (b)? d....

Degree of operating leverage Grey Products has fixed operating costs of $390,000, variable operating costs of...

Degree of operating leverage Grey Products has fixed operating costs of $390,000, variable operating costs of $16.06 per unit, and a selling price of $63.54 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 11,000, 13,000, and 15,000 units, respectively. c. With 13,000 units as a base, what are the percentage changes in units sold and EBIT as sales move from the base to the other sales levels used in part (b)? d....

Operating leverage refers to the use of fixed costs to increase percentage changes in operating income...

Operating leverage refers to the use of fixed costs to increase percentage changes in operating income when sales volume changes. True False

Degree of operating leverage Grey Products has fixed operating costs of $ 382 comma 000, variable...

Degree of operating leverage Grey Products has fixed operating costs of $ 382 comma 000, variable operating costs of $ 15.93 per unit, and a selling price of $ 63.05 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 11 comma 000, 12 comma 000, and 13 comma 000 units, respectively. c. With 12 comma 000 units as a base, what are the percentage changes in units sold and EBIT as sales move...

CH13 Leverage refers to the use of fixed costs to increase the return to shareholders. Operating...

CH13 Leverage refers to the use of fixed costs to increase the return to shareholders. Operating leverage is the use of fixed operating costs such as fixed cost of goods sold and depreciation to magnify the earnings before interest and taxes. The degree of operating leverage (DOL) = % change in EBIT / % change in Sales. Financial leverage refers to the use of fixed financing costs such as long-term debts to magnify the return to shareholders. The degree of...

1) A decrease in an import tariff will result in ___ A) an increase in price,...

1) A decrease in an import tariff will result in ___ A) an increase in price, but a decrease in quantity purchased. B) a decrease in price and a decrease in quantity purchased. C) a decrease in imports, but an increase in domestic production. D) an increase in imports, but a decrease in domestic production 2) The largest component of GDP is A) tax revenue B)the nation's capital stock C) CAPX spending D) consumer spending E) government spending 3) When...

A decrease in lung compliance will result in which of the following situations? a. an increase...

A decrease in lung compliance will result in which of the following situations? a. an increase in the vital capacity of the lung b. a trend toward increased ventilation relative to pulmonary perfusion c. increase the work of breathing d. a greater change in volume for a given change in transmural pressure

For each of the transactions below, record whether it would result in an increase or decrease...

For each of the transactions below, record whether it would result in an increase or decrease in assets, liabilities, and net assets. Provide an answer for assets, liabilities, and net assets for each of the following transactions. An organization: Earns revenue Receives a donor pledge Purchases supplies with cash Purchases supplies on account Takes out a loan Repays loan principal Receives payment on a pledge Makes a payment on an amount it owes Prepays for insurance Uses prepaid insurance Uses...

52. "Crowding out" refers to the decrease in ________ that may result from an increase in...

52. "Crowding out" refers to the decrease in ________ that may result from an increase in government spending. A.imports B.private investment C.private saving D.all of the above E.none of the above 53.If taxes increase, private saving __________, government saving __________, and national saving __________. A.does not change; increases; increases B.increases; increases; increases C.decreases; increases; does not change D.decreases; increases; increases 54.The velocity of money ________. A.times the money supply should equal total income according to the equation of exchange B.represents...

For each of the transactions below, record whether it would result in an increase or decrease...

For each of the transactions below, record whether it would result in an increase or decrease in assets, liabilities, and net assets. Provide an answer for assets, liabilities, and net assets for each of the following transactions. An organization: Earns revenue Receives a donor pledge Purchases supplies with cash Purchases supplies on account Takes out a loan Repays loan principal Receives payment on a pledge Makes a payment on an amount it owes Prepays for insurance Uses prepaid insurance Uses...

Question

An increase in fixed operating costs will result in ________. a.) a decrease in the degree...

Solutions

Expert Solution

Related Solutions

Degree of operating leverage Grey Products has fixed operating costs of $390,000, variable operating costs of...

Degree of operating leverage Grey Products has fixed operating costs of $390,000, variable operating costs of...

Operating leverage refers to the use of fixed costs to increase percentage changes in operating income...

Degree of operating leverage Grey Products has fixed operating costs of $ 382 comma 000, variable...

CH13 Leverage refers to the use of fixed costs to increase the return to shareholders. Operating...

1) A decrease in an import tariff will result in ___ A) an increase in price,...

A decrease in lung compliance will result in which of the following situations? a. an increase...

For each of the transactions below, record whether it would result in an increase or decrease...

52. "Crowding out" refers to the decrease in ________ that may result from an increase in...

For each of the transactions below, record whether it would result in an increase or decrease...