Problem 2: Contribution margin income statements for Beyonce Couture and Rihanna Cosmetics for the year ended 2020 are as follows: Contribution Margin Income Statement for the year ended 2020 Beyonce...


Problem 2: Contribution margin income statements for Beyonce Couture and Rihanna<br>Cosmetics for the year ended 2020 are as follows:<br>Contribution Margin Income Statement for the year ended 2020<br>Beyonce Couture<br>2,500,000<br>Rihanna Cosmetics<br>Sales<br>3,000,000<br>Less: Variable Costs<br>Cost of Goods Sold<br>512,367<br>645,978<br>Selling and Administrative<br>366,771<br>1,012,749<br>1,987,251<br>Expenses<br>269,874<br>782,241<br>1,717,759<br>Total Variable Costs<br>Contribution Margin<br>Less: Fixed Costs<br>Rent Expense<br>Wages and Salaries<br>420,000<br>267,898<br>687,898<br>1,029,861<br>560,000<br>369,746<br>929,746<br>Total Fixed Costs<br>Operating Income<br>1,057,505<br>Suppose that the total number of variable costs per unit sold are P131.58 for Beyonce<br>Couture and P111.11 for Rihanna Cosmetics. Compute for the operating leverage of both<br>companies.<br>

Extracted text: Problem 2: Contribution margin income statements for Beyonce Couture and Rihanna Cosmetics for the year ended 2020 are as follows: Contribution Margin Income Statement for the year ended 2020 Beyonce Couture 2,500,000 Rihanna Cosmetics Sales 3,000,000 Less: Variable Costs Cost of Goods Sold 512,367 645,978 Selling and Administrative 366,771 1,012,749 1,987,251 Expenses 269,874 782,241 1,717,759 Total Variable Costs Contribution Margin Less: Fixed Costs Rent Expense Wages and Salaries 420,000 267,898 687,898 1,029,861 560,000 369,746 929,746 Total Fixed Costs Operating Income 1,057,505 Suppose that the total number of variable costs per unit sold are P131.58 for Beyonce Couture and P111.11 for Rihanna Cosmetics. Compute for the operating leverage of both companies.

Jun 08, 2022
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