The Richard Company Has an Operating Leverage of 2

question 60

Multiple Choice

The Richard Company has an operating leverage of 2.Sales for the current year are $100,000 with a contribution margin of $50,000.Sales are expected to be $150,000 for the following year.Operating income for the following year can be expected to increase by what amount over the current year?

• A)40%
• B)200%
• C)$25,000
• D)$50,000

Interpret and calculate the impact of underapplied or overapplied manufacturing overhead on COGS.

Analyze and calculate raw materials usage based on inventory data.

Understand and calculate the allocation of underapplied or overapplied manufacturing overhead.

Determine the predetermined overhead rate based on direct labor-hours and manufacturing costs.

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Definitions:

EEOC

Equal Employment Opportunity Commission, a federal agency enforcing laws against workplace discrimination.

National Labor Relations Act

A foundational United States law that protects the rights of employees to organize, bargain collectively, and engage in other activities concerning their labor rights.

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Sexual Harassing

Unwanted and inappropriate actions, comments, or conduct of a sexual nature that creates a hostile or offensive work environment.