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Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $272,500 $768,000 Variable costs 109,300 460,800 Contribution margin $163,200 $307,200

Beck Inc. and Bryant Inc. have the following operating data:

Beck Inc. Bryant Inc.
Sales $272,500 $768,000
Variable costs 109,300 460,800
Contribution margin $163,200 $307,200
Fixed costs 115,200 179,200
Income from operations $48,000 $128,000

a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

Beck Inc. fill in the blank 1
Bryant Inc. fill in the blank 2

b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number.

Dollars Percentage
Beck Inc. $fill in the blank 3 fill in the blank 4 %
Bryant Inc. $fill in the blank 5 fill in the blank 6 %

c. The difference in the

increasesdecreases

of income from operations is due to the difference in the operating leverages. Beck Inc.'s

higherlower

operating leverage means that its fixed costs are a

largersmaller

percentage of contribution margin than are Bryant Inc.'s.

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