Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 9-30 Degree of Operating Leverage (LO 9-5) The following sales and cost data in thousands) are for two companies in the transportation industry Company
Exercise 9-30 Degree of Operating Leverage (LO 9-5) The following sales and cost data in thousands) are for two companies in the transportation industry Company Percent of Amount Sales $160,000 30 50.000 SOR 25.000 $ 52,000 100% Sales Variable costs Contribution margin Fixed costs Operating profit 0.00 Comenys Percent of Amount Sales 5160,000 100% 32,000 20 $120,000 BOR 53,000 $ 75,000 Required: 1-a. Calculate the degree of operating leverage (DOL) for each company 1-b.If sales increase from the present level, which company benefits more? 2. Assume that sales rise 10% in the next year but that everything else remains constant Calculate the percentage increase in profit for each company Complete this question by entering your answers in the tabs below. Reg LA Reg 18 Reg 2 Calculate the degree of operating leverage (DOL) for each company. (Round your answers to 3 decimal places.) Company A Company B Degree of operating leverage 2500 Req18 >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started