Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

C. The difference in the (Increases or decreases) of income from operations is due to the difference in the operating leverages. Beck Inc's (higher or

image text in transcribed

C. The difference in the (Increases or decreases) of income from operations is due to the difference in the operating leverages. Beck Inc's (higher or lower) operating leverage means that its fixed costs are a (larger or smaller) percentage of contribution margin than are Bryants Inc's.

Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $255,500 $816,000 Variable costs 102,500 489,600 Contribution margin $153,000 $326,400 Fixed costs 102,000 190,400 Income from operations $51,000 $136,000 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 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. 7 % Bryant Inc. c. The difference in the operating leverage means that of income from operations is due to the difference in the operating leverages. Beck Inc.'s percentage of contribution margin than are Bryant Inc.'s. its fixed costs are a

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Hotel And Restaurant Accounting

Authors: Cole Raymond

8th Edition

0866125531, 9780866125536

More Books

Students also viewed these Accounting questions

Question

Where do the authors work?

Answered: 1 week ago