Wham Company sells electronic squirrel repellants for $60. Variable costs are 60% of sales and total fixed costs are $40,000. What is the firm's magnitude of operating leverage if 2,000 units are sold?
A. 6.00
B. 2.25
C. 0.17
D. None of these
Answer: A
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A theory which predicts that retail institutions have identifiable stages from introduction to decline is _____
a. the retail life cycle b. the wheel of retailing c. scrambled merchandising d. rationalized retailing
Carey decided to incorporate her business under the name yStar Inc Before yStar was incorporated, Carey signed a contract in the name of yStar, Inc to have some office space remodeled. Which statement is correct?
a. yStar is liable on the contract because the contract was signed in its name. b. yStar becomes liable on the contract as soon as it is incorporated. c. yStar is liable on the contract if the contractor knows that the corporation does not yet exist. d. yStar will be liable on the contract only if the corporation adopts the contract.
The creation of uncertainty and the analysis of many alternatives regarding future action is referred to as:
A. variety reduction. B. variety amplification. C. variety subtraction. D. variety expansion.
Wegener Corporation's most recent balance sheet and income statement appear below:Balance SheetDecember 31, Year 2 and Year 1(in thousands of dollars)AssetsYear 2Year 1Current assets: Cash$90 $110 Accounts receivable, net 220 270 Inventory 130 150 Prepaid expenses 70 80 Total current assets 510 610 Plant and equipment, net 1,000 920 Total assets$1,510 $1,530 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$90 $110 Accrued liabilities 60 60 Notes payable, short term 50 60 Total current liabilities 200 230 Bonds payable 130 140 Total liabilities 330 370 Stockholders' equity: Common stock, $1 par value 400 400 Additional paid-in
capital 240 240 Retained earnings 540 520 Total stockholders' equity 1,180 1,160 Total liabilities & stockholders' equity$1,510 $1,530?Income StatementFor the Year Ended December 31, Year 2(in thousands of dollars)Sales (all on account)$1,400 Cost of goods sold 860 Gross margin 540 Selling and administrative expense 450 Net operating income 90 Interest expense 19 Net income before taxes 71 Income taxes (30%) 21 Net income$50 Required:Compute the following for Year 2:a. Working capital.b. Current ratio.c. Acid-test (quick) ratio.d. Accounts receivable turnover.e. Average collection period.f. Inventory turnover.g. Average sale period. What will be an ideal response?