Operating Leverage

Beck Inc. and Bryant Inc. have the following operating data:

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.

c$.$ The difference in the increases $$ of income from operations is due to the difference in the operating leverages. Beck Inc.$\text{'}$s higher $$ operating leverage means

that its fixed costs are a

$$ percentage of contribution margin than are Bryant Inc.$\text{'}$s$.$

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