required: 1. suppose dana’s would like to generate a profit of $800. determine how many rosettes it must sell to achieve this target profit. 2. if dana’s sells 1,100 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. calculate dana’s degree of operating leverage if it sells 1,100 rosettes. 4a. using the degree of operating leverage, calculate the change in dana’s profit if unit sales drop to 935 units. 4b. prepare a new contribution margin income statement to verify change in dana's profit.

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NoahJerowski7286 NoahJerowski7286

11-10-2022
Business

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required: 1. suppose dana’s would like to generate a profit of $800. determine how many rosettes it must sell to achieve this target profit. 2. if dana’s sells 1,100 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. calculate dana’s degree of operating leverage if it sells 1,100 rosettes. 4a. using the degree of operating leverage, calculate the change in dana’s profit if unit sales drop to 935 units. 4b. prepare a new contribution margin income statement to verify change in dana's profit.

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rafikiedu03 rafikiedu03 · Answer 1 · 2022-10-18T09:40:09+02:00

Dana needs to sell 1,315 rosettes to achieve this target profit, the Margin of safety in units=200 rosettes, the Margin of safety in sales dollars=$800, and the Percentage margin of safety=1.67%

Dana's degree of operating leverage=6, An increase in the degree of operating leverage implies a reduction in the profits by 750% and Contribution margin=$3,024.

In finance, leverage is any technique related to borrowing a budget to shop for matters, hoping that future profits could be many times extra than the value of borrowing. This approach is known as after a lever in physics, which amplifies a small input force into a greater output pressure, due to the fact hit leverage amplifies the relatively small amount of money wished for borrowing into large quantities of earnings. But, the approach additionally entails the excessive hazard of no longer being capable of pay again a big mortgage. Normally, a lender will set a restriction on how a lot of a chance it is ready to take and could set a restrict on how good deal leverage it's going to allow, and could require the obtained asset to be furnished as collateral safety for the loan.

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