Variable cost per unit (a) Sales revenue (8,000 units X $31.00) Variable cost (8,000 units x a) Contribution margin Fixed cost Net income Company Name Larson Benson $ 19.00 $ 9.50 $ 248,000 $ 248,000 (152,00) (76,000) $ 96,000 $ 172,000 (24,200) (100, 100) 5 71,900 $ 71,900 Required a. Use the contribution margin approach to compute the operating leverage for each firm, b. If the economy expands in coming years, Larson and Benson will both enjoy a 11 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) c. If the economy contracts in coming years, Larson and Benson will both suffer a 11 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) Complete this question by entering your answers in the tabs below. Required A Required Required Use the contribution margin approach to compute the operating leverage for each firm. (Round your answers to 2 decimal places) Larson Benson Company Name Operating leverage Required > Complete this question by entering your answers in the tabs below. Required A Required B Required If the economy expands in coming years, Larson and Benson will both enjoy a 11 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) (Round "Percentage" answer to 2 decimal place (le, 2345 should be entered as 23.45). Round final answers to nearest whole dollar) Show less Company Name Larson Benson 19.00 $ 9.50 $ Variable cost per unit Sales revenue Variable cost Contribution margin Fixed cost Net income Percentage change (Required A Required> CU U U ULICO), Wu LUFTVENU I ULGI Vanovic Complete this question by entering your answers in the tabs below. Required A Required B Reduired If the economy contracts in coming years, Larson and Benson will both suffer a 11 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) (Round "Percentage answer to 2 decimal place (ie, 2345 should be entered as 23.45). Round final answers to nearest whole dollar) Show less Pant Company Name Larson Benson $ 19.00 $ 950 ferences Variable cost per unit Sales revenue Variable cost Contribution margin Food cost Not income Percentage change
