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Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Bryant Inc. Beck Inc. $240,500 Sales $640,000 Variable costs 96,500 384,000 Contribution margin
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Bryant Inc. Beck Inc. $240,500 Sales $640,000 Variable costs 96,500 384,000 Contribution margin $256,000 $144,000 96,000 Fixed costs 128,000 Income from operations $48,000 $128,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. 2 b. How much would income from operations increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. % Bryant Inc. c. The difference in the increases operating leverage of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher percentage of contribution margin than are Bryant Inc.'s. means that its fixed costs are a larger
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