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number 3 is not making any sense Income statements for two different companies in the same industry are as follows Alpha, Ine Bera, Inc. $500,000
number 3 is not making any sense
Income statements for two different companies in the same industry are as follows Alpha, Ine Bera, Inc. $500,000 $500,000 350,000200,000 Contribution margin$150,000 $300,000 250,000 Sales Less: Variable costs Less: Fixed costs 100,000 Operating income50,000 $ 50,000 Required: 1. Compute the degree of operating leverage for each company. 2. Compute the break-even point for each company. Explain why the break-even point for Beta, Inc., is higher. 3. Suppose that both companies experience a 50 percent increase in revenues Compute the percentage change in profits for each company. Explain why the percentage increase in Beta's profits is so much greater than that of AlphaStep by Step Solution
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