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urgent 30 minutes Last year Company A had revenues of $12,000, variable costs of $2,000, and fixed costs of $6,000. a) Calculate the degree of
urgent 30 minutes
Last year Company A had revenues of $12,000, variable costs of $2,000, and fixed costs of $6,000. a) Calculate the degree of operating leverage (DOL) for this company b) Company B in the same industry has similar net margins, but a DOL of 1.8. If sales at this second firm increase by 12%, by what percent will Operating profit increase? c) If the economy takes a dive next year, and both company's sales are affected equally, which company will have the most difficulty? a) DOL - 33; b) 33.3%; c) Company B a) DOL - 2.5; b) 12%; c) Company B a) DOL - 2.5; b) 21,6%; c) Company A Oa) DOL - 33; b) 21.6%; Company A a) DOL - 2.5; b) 33.3% c) Company B a) DOL - 33; b) 12%; c) Company A Step by Step Solution
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