Question
Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing
Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing their different cost structures:
| Remo Co. | Angelo Inc. | ||||
| Sales revenue | $ | 335,000 | $ | 335,000 | |
| Less: Variable cost | 225,000 | 135,000 | |||
| Contribution margin | $ | 110,000 | $ | 200,000 | |
| Less: Fixed cost | 40,000 | 130,000 | |||
| Net operating income | $ | 70,000 | $ | 70,000 | |
Required: Calculate each companys degree of operating leverage. (Round your answers to 3 decimal places.)
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Management Accounting
Authors: Donna K. Ulmer
7th Edition
0324234880, 978-0324234886
