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 Income from operations $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 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. % of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher operating leverage means that its fixed costs are a larger percentage of c. The difference in the increases contribution margin than are Bryant Inc.'s. Feedback Check My Work a. Divide the contribution margin by the income from operations. b. What does the operating leverage show? c. How does operating leverage affect operating income? Learning Objective 5