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The following sales and cost data (in thousands) are for two companies in the transportation industry: Company A Company B Percent of Sales Percent of
The following sales and cost data (in thousands) are for two companies in the transportation industry: Company A Company B Percent of Sales Percent of Sales Amount $260,000 130,000 $130,000 27,300 $102,700 Amount $260,000 78,000 $182,000 72,300 $109,700 Sales Variable costs Contribution margin Fixed costs Operating profit 100% 50 50% 100% 30 70% Required: 1-a. Calculate the degree of operating leverage (DOL) for each company. 1-b. If sales increase from the present level, which company benefits more? 2. Assume that sales rise 20% in the next year but that everything else remains constant. Calculate the percentage increase in profit for each company Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 If sales increase from the present level, which company benefits more? Company.A Company B Req 1A Req 2>
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