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The following sales and cost data (000s) are for two companies in the transportation industry: Company A Company B Amount Percent of Sales Amount Percent
The following sales and cost data (000s) are for two companies in the transportation industry: |
Company A | Company B | ||||||||||||
Amount | Percent of Sales | Amount | Percent of Sales | ||||||||||
Sales | $ | 240,000 | 100 | % | $ | 240,000 | 100 | % | |||||
Variable costs | 120,000 | 50 | 72,000 | 30 | |||||||||
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Contribution margin | $ | 120,000 | 50 | % | $ | 168,000 | 70 | % | |||||
Fixed costs | 21,600 | 62,600 | |||||||||||
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Operating profit | $ | 98,400 | $ | 105,400 | |||||||||
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Required: |
1-a. | Calculate the degree of operating leverage (DOL) for each company. (Round your answers to 3 decimal places.) For company A and B.
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