Varner Inc. and King Inc. have the following operating data: a . Compute the operating leverage for
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Question:
Varner Inc. and King Inc. have the following operating data:
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 If required, round answers to nearest whole number.
c The difference in the increasesdecreases
of income from operations is due to the difference in the operating leverages. Varner Inc.s higherlower operating leverage means thst its
fixed costs are a
percentage of contribution margin than are King Inc.s
operating leverage means that its fixed costs are a largersmaller percentage of contribution margin than are king inc.s
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