During the most recent fiscal period, Cherokee Company had sales of $80,000. Variable costs are 20% of sales and fixed costs amounted to $48,000 for the year.
Calculate the following:
a. Contribution margin ratio
b. Operating leverage
c. Break-even sales in dollars
d. Operating profit if sales increase by 20% next year

Question

During the most recent fiscal period, Cherokee Company had sales of $80,000. Variable costs are 20% of sales and fixed costs amounted to $48,000 for the year. 
Calculate the following:
a. Contribution margin ratio
b. Operating leverage
c. Break-even sales in dollars
d. Operating profit if sales increase by 20% next year

Quizplus · Accepted Answer

The Answer of During the most recent fiscal period, Cherokee Company had sales of $80,000. Variable costs are 20% of sales and fixed costs amounted to $48,000 for the year. 
Calculate the following:
a. Contribution margin ratio
b. Operating leverage
c. Break-even sales in dollars
d. Operating profit if sales increase by 20% next year

During the Most Recent Fiscal Period, Cherokee Company Had Sales