Question

Rose Inc. and Tulip Inc. have the following operating data:
ROSE INC. SALES- 920,000
VARIABLE COST 552,000 CONTRIBUTION MARGIN 368,000
FIXED COSTS 288,000 INCOME FROM OPERATIONS 80,000
TULIP INC. SALES-1,050,000 VARIABLE COSTS 630,000
CONTRIBUTION MARGIN 420,000
FIXED COSTS 270,000 INCOME FROM OPERATIONS 150,000
a. Compute the operating leverage for Rose Inc. and Tulip Inc. If required, round to one decimal place.
Rose Inc. 4.6
Tulip Inc. 2.8
b. How much would income from operations increase for each company if the sales of each increased by 25%?
Dollars Percentage
Rose Inc. $ %
Tulip Inc. $ %



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  • CreatedAugust 26, 2013
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