Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $396,800 $1,144,000 Variable costs 159,200 686,400 Contribution
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $396,800 $1,144,000 Variable costs 159,200 686,400 Contribution margin $237,600 $457,600 Fixed costs 171,600 281,600 Income from operations $66,000 $176,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. 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. Beck Inc. Dollars Percentage % Bryant Inc. % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s percentage of contribution margin than are Bryant Inc.'s. operating leverage means that its fixed costs are a
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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