Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Operating Leverage
Beck Inc. and Bryant Inc. have the following operating data:
Beck Inc. | Bryant Inc. | |||
Sales | $229,100 | $589,500 | ||
Variable costs | (91,900) | (353,700) | ||
Contribution margin | $137,200 | $235,800 | ||
Fixed costs | (88,200) | (104,800) | ||
Operating income | $49,000 | $131,000 |
a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.
Beck Inc. | |
Bryant Inc. |
b. How much would operating income increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number.
Dollars | Percentage | ||
Beck Inc. | $ | % | |
Bryant Inc. | $ | % |
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