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Company A is a manufacturer with sales of $3,700,000 and a 60% contribution margin. Its fixed costs equal $1,810,000. Company B is a consulting firm
Company A is a manufacturer with sales of $3,700,000 and a 60% contribution margin. Its fixed costs equal $1,810,000. Company B is a consulting firm with service revenues of $3,800,000 and a 20% contribution margin. Its fixed costs equal $330,000.
Company A is a manufacturer with sales of $3,700,000 and a 60% contribution margin. Its fixed costs equal $1,810,000. Company B is a consulting firm with service revenues of $3,800,000 and a 20% contribution margin. Its fixed costs equal $330,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales. Complete this question by entering your answers in the tabs below. DOL Company Benefits Compute the degree of operating leverage (DOL) for each company Contribution Margin. Income Statement Company A Company B Choose Numarter Degree of Operating Leverage Denominator Company A Company B Ratio Degree of Operating Leverage 0 0 DU Company Benefits > Company Als a manufacturer with sales of $3,700,000 and a 60% contribution margin. Its fixed costs equal $1.810,000. Compa a consulting firm with service revenues of $3,800,000 and a 20% contribution margin. Its fixed costs equal $330,000 Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sal Complete this question by entering your answers in the tabs below. DOL Company Benefits Which company benefits more from a 20% increase in sales. Which company benefits more from a 20% increase in sales, Step by Step Solution
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