Premium Plumbing Products serves both residential and commercial clients. Annual financial information for Premium is as follows:
a. If variable costs for the residential business increase by 10%, what is the new degree of operating leverage (DOL)? (Round to 4 decimal places)
b. If Premium has an effective tax rate of 20%, what is the new net income after tax amount?

Question

Premium Plumbing Products serves both residential and commercial clients. Annual financial information for Premium is as follows:  
a. If variable costs for the residential business increase by 10%, what is the new degree of operating leverage (DOL)? (Round to 4 decimal places)
b. If Premium has an effective tax rate of 20%, what is the new net income after tax amount?

Quizplus · Accepted Answer

The Answer of Premium Plumbing Products serves both residential and commercial clients. Annual financial information for Premium is as follows:  
a. If variable costs for the residential business increase by 10%, what is the new degree of operating leverage (DOL)? (Round to 4 decimal places)
b. If Premium has an effective tax rate of 20%, what is the new net income after tax amount?

Premium Plumbing Products Serves Both Residential and Commercial Clients