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Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $221,400 $624,000 Variable costs (88,800) (374,400) Contribution margin $132,600
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $221,400 $624,000 Variable costs (88,800) (374,400) Contribution margin $132,600 $249,600 Fixed costs (93,600) (145,600) Operating income $39,000 $104,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would operating income increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Beck Inc. Bryant Inc. c. The difference in the Beck Inc.'s Dollars Percentage % % of operating income is due to the difference in the operating leverages. operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
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