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13. McGraw Hills Corporation sells managerial accounting textbooks. Fixed costs are $120,000 and variable costs per unit are $20. McGraw Hills is considering the purchase of new equipment that would reduce hourly labor. However, total costs will remain the same. What effect would the purchase of the new equipment have on McGraw Hills' operating leverage? A) No effect. Operating leverage will stay the same because total costs do not change. B) Operating leverage will increase. C) Operating leverage will decrease. D) The problem does not provide enough information to answer the question. 14. Iggi Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050, then in August the total budgeted cash disbursements for raw materials purchases is closest to: A) $265,150 B) $153,930 C) $166,830 D) $111,220 15. Lion Corporation has provided the following information concerning its raw materials purchases. The budgeted cost of raw materials purchases in November is $286,032. The company pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. The budgeted accounts payable balance at the end of November is closest to: A) $114,413 B) $140,333 C) $171,619 D) $286,032

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