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Trimax, Inc. Quintex, Inc. Sales $480,000 $675,000 Less: Variable costs 240,000 135,000 Contribution margin $240,000 $540,000 Less: Fixed costs 180,000 480,000 Operating income $60,000
Trimax, Inc. Quintex, Inc. Sales $480,000 $675,000 Less: Variable costs 240,000 135,000 Contribution margin $240,000 $540,000 Less: Fixed costs 180,000 480,000 Operating income $60,000 $60,000 Required: 1. Compute the degree of operating leverage for each company. Trimax Quintex 2. Compute the break-even point in dollars for each company. Trimax, Inc. Quintex, Inc. Why is the break-even point for Quintex, Inc., higher? 3. Suppose that both companies experience a 60 percent increase in revenues. Compute the percentage change in profits for each company. Trimax % Quintex 0/
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