Any solutions ffrom the text Fundamentals of Managerial Accounting by Edmonds problem ACT 2-7 and ATC 2-1 (pg 101 and 104)

ACT 2-1 Problem pg 101

Required: ( See tables below as well)

a, Determine Which Company appears to have the higher operating leverage

b. Write a paragrpah or two explaning why the company you identified in Requirement A might be expected to have the higher operating leverage.

c. If revenues for both companies declined, which company do you think would likely experience the greater decline in operating earnings? Explain your answer.

Merk & Co

Merk and Co	2011	2010
Revenue	$48,047	$45,987
Operating Earnings	$7,334	1,653

Costco Corporation	2011	2010
Revenue	$88,915	$77,946
Operating earnings	$2,439	$2,077