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a little help 1. Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a
a little help
1. Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company B's fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? a.Company A's operating leverage is 3, and Company B's is 2, so Company B will benefit most from an increase in sales. b.Company A's operating leverage is 3, and Company B's is 2, so Company A will benefit most from an increase in sales. c.Company A's operating leverage is 2, and Company B's is 3, so Company A will benefit most from an increase in sales. d. Company A's operating leverage is 2, and Company B's is 3, so Company B will benefit most from an increase in sales. 2. A product has a sales price of $370 and a per-unit contribution margin of $74. What is the contribution margin ratio? Contribution margin ratio fill in the blank 1 % 3.Salvadores Manufacturing builds and sells snowboards, skis and poles. The sales price and variable cost for each follows: Selling Price Variable Cost Product per Unit per Unit Snowboards $310 $170 Skis $410 $240 Poles $40 $30 Their sales mix is reflected in the ratio 6:3:1. What is the overall unit contribution margin for Salvadores with their current product mix? Overall Unit Contribution Margin $fill in the blank 1Step by Step Solution
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