Question
Company A has current sales of $10,110,961 and a 48% contribution margin. Its fixed costs are $2,873,786. Company B is a service firm with current
Company A has current sales of $10,110,961 and a 48% contribution margin. Its fixed costs are $2,873,786. Company B is a service firm with current service revenue of $5,890,192 and a 12% contribution margin. Company Bs fixed costs are $660,609. Compute the degree of operating leverage for Company A. Round to the hundredth, two decimals.
Company A has current sales of $10,785,901 and a 40% contribution margin. Its fixed costs are $2,351,245. Company B is a service firm with current service revenue of $6,680,109 and a 23% contribution margin. Company Bs fixed costs are $678,280. Compute the degree of operating leverage for Company A if there was a 14% increase in sales. Round to the hundredth, two decimals.
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