Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $266,500 $684,000 Variable costs (106,900) (410,400) Contribution margin

image text in transcribed

Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $266,500 $684,000 Variable costs (106,900) (410,400) Contribution margin $159,600 $273,600 Fixed costs (102,600) (121,600) Operating income $57,000 $152,000 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 operating income increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. % Bryant Inc. % C. The difference in the of operating income is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Controllers Toolkit

Authors: Christine H. Doxey

1st Edition

1119700647, 9781119700647

More Books

Students also viewed these Accounting questions