Question
Company A has current sales of $10,544,317 and a 44% contribution margin. Its fixed costs are $2,169,163. Company B is a service firm with current
Company A has current sales of $10,544,317 and a 44% contribution margin. Its fixed costs are $2,169,163. Company B is a service firm with current service revenue of $5,665,052 and a 26% contribution margin. Company Bs fixed costs are $682,433. Compute the degree of operating leverage for Company B. Round to the hundredth, two decimals.
Company A has current sales of $11,848,659 and a 41% contribution margin. Its fixed costs are $2,773,253. Company B is a service firm with current service revenue of $6,238,629 and a 13% contribution margin. Company Bs fixed costs are $602,023. Compute the degree of operating leverage for Company B if there was a 26% increase in revenue. Round to the hundredth, two decimals.
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Managerial Decision Modeling With Spreadsheets
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair
3rd Edition
136115837, 978-0136115830
