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Calculate the contribution margin

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The current information for the VC Warren Company is shown below;Sales $500,000;Less variable expenses $175,000;Contribution margin $325,000;Less fixed expenses $90,000;Net operating income $235,000;1. Calculate the contribution margin;2. Calculate the breakeven point. Show the proof in the format above;3. Calculate the operating leverage;4. Using the operating leverage, calculate the projected net income if the sales of $500,000 were to increase by 10%. Show the proof in the format above.;5. Using the operating leverage, calculate the projected net income if the sales of $500,000 were to increase by 20%. Show the proof in the format above.

 

Paper#20872 | Written in 18-Jul-2015

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