Author Question: Bumper earned net income of $72,000 and has fixed costs of $36,000. Bumper sold 11,000 units for $30 ... (Read 48 times)

curls713 · **on:** Feb 5, 2023

Question 1

All other things equal, a company can increase its operating leverage by
◦ converting commission-based salespeople to salaried.
◦ converting manufacturing overhead to general and administrative expenses.
◦ converting indirect costs to direct costs.
◦ decreasing the amount of depreciation charges.

Question 2

Bumper earned net income of $72,000 and has fixed costs of $36,000. Bumper sold 11,000 units for $30 each and has a 40% contribution margin ratio. What were Bumper's operating income and tax rate?
◦ $120,000; 40%
◦ $96,000; 25%
◦ $162,000; 45%
◦ $270,000; 27%

mgranuc · **Reply #1 on:** Feb 5, 2023

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