Question
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $315,300 $1,027,000 Variable costs 126,500 616,200 Contribution margin
Operating Leverage
Beck Inc. and Bryant Inc. have the following operating data:
| Beck Inc. | Bryant Inc. | |||
| Sales | $315,300 | $1,027,000 | ||
| Variable costs | 126,500 | 616,200 | ||
| Contribution margin | $188,800 | $410,800 | ||
| Fixed costs | 129,800 | 252,800 | ||
| Income from operations | $59,000 | $158,000 | ||
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. | $ | % | |
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Auditing A Practical Approach
Authors: Fiona Campbell, Robyn Moroney, Jane Hamilton, Valerie Warren
2nd Canadian edition
9781118377901, 1118377907, 1119048095, 978-1118849415
