Question
information for two companies follows: Skittles Company Starburst Company Sales $ 5,294,650 $ 4,066,500 Contribution margin 3,934,650 1,441,500 Fixed costs 3,163,150 976,500 (1) Compute the
information for two companies follows:
| Skittles Company | Starburst Company | |
|---|---|---|
| Sales | $ 5,294,650 | $ 4,066,500 |
| Contribution margin | 3,934,650 | 1,441,500 |
| Fixed costs | 3,163,150 | 976,500 |
(1) Compute the degree of operating leverage (DOL) for each company. (2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
