USE THE FOLLOWING INFORMATION FOR THE NEXT 3QUESTIONS
Below is an income statement for XYZ Company for 2020:
Sales | $400,000 |
Variable costs | (150,000) |
Contribution margin | $250,000 |
Fixed costs | (200,000) |
Net Income | $ 50,000 |
37.Calculate breakeven sales dollars for XYZ Company using theY-formula.
A. $220,000
B. $320,000
C. $350,000
D. $270,000
38. The degree of leverage(DOL) for XYZ Company in 2020 is equal to whatamount?
A. 1.0
B. 2.0
C. 3.0
D. 4.0
E. 5.0
39. Using the degree of leverage(DOL) for 2020 that you just calculated inquestion #38, if XYZ Company expects sales to increase 10% in 2021,by how much will the net income increase in 2021?
- $5,000
- $10,000
- $15,000
- $20,000
- $25,000
