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Sunrise Inc and Sunset Inc have the following operating data: Sunrise Inc. Sunset Inc sales $3,125,000 $840,000,000 variable costs -1,875,000 -5,000,000 contribution margin $1,250,000 $340,000,000
Sunrise Inc and Sunset Inc have the following operating data: Sunrise Inc. Sunset Inc sales $3,125,000 $840,000,000 variable costs -1,875,000 -5,000,000 contribution margin $1,250,000 $340,000,000 fixed costs -750,000 -2,400,000 operating income $500,000 $1,000,000 a. compute the operating leverage for Sunrise Inc. and Sunset Inc. b. How much would operating income increase for each companies if the sales of each increse by 25%? c. why is there a difference in the increase in operating incc ng income for the two companies
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