Question
Varner Inc. and King Inc. have the following operating data: Varner King Sales $ 161,700 $468,000 Variable costs 64,900 280,800 Contribution margin $96,800 $187,200 Fixed
Varner Inc. and King Inc. have the following operating data: Varner King Sales $ 161,700 $468,000 Variable costs 64,900 280,800 Contribution margin $96,800 $187,200 Fixed costs 52,800 70,200 Income from operations $44,000 $117,000 a. Compute the operating leverage for Varner Inc. and King Inc. If required, round to one decimal place. Varner Inc.: King Inc.: b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Varner Inc.: $ % King Inc.: $ %
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