Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please use the following information to answer and fill in the blanks. Thanks Company A is a manufacturer with sales of $3,400,000 and a 60%

Please use the following information to answer and fill in the blanks. Thanks

image text in transcribedimage text in transcribed
Company A is a manufacturer with sales of $3,400,000 and a 60% contribution margin. Its fixed costs equal $1,500,000. Company B is a consulting firm with service revenues of $3,300,000 and a 25% contribution margin. Its fixed costs equal $310,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales. Complete this question by entering your answers in the tabs below. DOL Company Benefits Compute the degree of operating leverage (DOL) for each company. Contribution Margin Income Statement Company A Company B Degree of Operating Leverage Choose: Numerator 1 Denominator Ratio = Degree of Operating Leverage Company A 0 Company B 0Which company benefits more from a 20% increase in sales. Which company benefits more from a 20% increase in sales

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

Managerial Accounting For Dummies

Authors: Mark P Holtzman, Karen Schoenebeck

1st Edition

1118116429, 978-1118116425

More Books

Students also viewed these Accounting questions

Question

Define intimacy and explain how to develop it in a relationship.

Answered: 1 week ago