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Based on the income statements shown below, which division has the cost structure with the highest operating leverage? Soft Drinks Bottled Water Fruit Juices Revenue
Based on the income statements shown below, which division has the cost structure with the highest operating leverage?
| Soft Drinks |
| Bottled Water |
| Fruit Juices | ||||||
Revenue | $ | 64,000 |
|
| $ | 64,000 |
|
| $ | 64,000 |
|
Variable costs |
| (16,000 | ) |
|
| (8,000 | ) |
|
| (36,000 | ) |
Contribution margin |
| 48,000 |
|
|
| 56,000 |
|
|
| 28,000 |
|
Fixed costs |
| (40,320 | ) |
|
| (50,320 | ) |
|
| (7,680 | ) |
Net income | $ | 7,680 |
|
| $ | 5,680 |
|
| $ | 20,320 |
|
|
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