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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. 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 45 Compute the degree of operating leverage (DOL) for each company. Contribution Margin Income Statement Company A Company B Sales $ 3.700.000 HOOFD Variable costs Contribution margin Fixed costs 1,810,000 Pretax income Compute the degree of operating leverage (DOL) for each company. TENDEN Contribution Margin Income Statement Company A Sales 3,700,000 Variable costs Contribution margin Fixed costs 1,810,000 Pretax income PANG TIE Degree of Operating Leverage Denominator Choose: Company A Company B T Numerator 11 A w BAN ANNU Ant MARE Company B Da DAMMAN F 201 the Tabl W PA Company Benefits > SAN A pe Ratio Degree of Operating Leverage 0 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 Which company benefits more from a 20% increase in sales. Which company benefits more from a 20% increase in sales
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