Cost effect of growth $120,000 U In summary, the net increase in operating income as a result of the growth component equals: Revenue effect of growth $400,000 F Cost effect of growth 120,000 U
http://faculty.winthrop.edu/alvisc/acct.309/Solutions%20R14/hca14_SM_CH13.doc
Change in operating income due to productivity $70,632 F The change in operating income between 2010 and 2011 can be analyzed as follows: Income Statement Amounts in 2010 (1) Revenue and Cost Effects of Growth in 2011 (2) Revenue and Cost Effects of Price-Recovery in 2011 (3) Cost Effect of Productivity in 2011 (4) Income Statement Amounts in 2011
http://faculty.winthrop.edu/alvisc/acct.309/Solutions%20R14/hca14_SM_CH13.doc
0.071 = Nominal Variable Cost Growth Rate The revenue stream is a five-year growing annuity. Pre-tax revenue in year 1 is found by multiplying the selling price ($3.15) by the number of units produced (1,000,000). The cash flows are growing at the nominal rate of 0.1025 and are discounted at 0.20.
https://finance.wharton.upenn.edu/~acmack/chapter%207%20solutions%20(7.1-7.33)%20v18.doc
In summary, the net effect on operating income as a result of the growth component equals: Revenue effect of growth $0 Cost effect of growth 0 Change in operating income due to growth $0 The Price-Recovery Component = ($59 ( $60) ( 40,000 = $40,000 U Costs of goods sold ($41 ( $40) ( 40,000 = $40,000 U
http://faculty.winthrop.edu/alvisc/acct.309/Solutions%20R14/hca14_SM_CH13.doc
doc for "annual operating revenue growth rate".(Page 1 of about 17 results)