Question
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $114,200 $303,000 Variable costs 45,800 181,800 Contribution margin
Operating Leverage
Beck Inc. and Bryant Inc. have the following operating data:
| Beck Inc. | Bryant Inc. | |||
| Sales | $114,200 | $303,000 | ||
| Variable costs | 45,800 | 181,800 | ||
| Contribution margin | $68,400 | $121,200 | ||
| Fixed costs | 30,400 | 20,200 | ||
| Income from operations | $38,000 | $101,000 | ||
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 15%? If required, round answers to nearest whole number.
| Dollars | Percentage | ||
| Beck Inc. | $ | % | |
| Bryant Inc. | $ | % | |
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Principles Of External Auditing
Authors: Brenda Porter, Jon Simon, David Hatherly
4th Edition
0470974451, 9780470974452
