Question

Dublin Company and Gary Corp. have degrees of operating leverage of 4.5 and 2.7, respectively. Both companies have net income of $80,000.
Required:
1. Without performing any calculations, discuss what the degrees of operating leverage tell us about the two companies.
2. Determine each company’s total contribution margin.
3. Compare the companies’ cost structures.



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  • CreatedFebruary 27, 2015
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