18.

Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $277,900 $684,000 Variable costs 111,500 410,400 Contribution margin $166,400 $273,600 Fixed costs 102,400 102,600 Income from operations $64,000 $171,000 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 income from operations 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. C. The difference in the increases of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher operating leverage means that its fixed costs are a larger percentage of contribution margin than are Bryant Inc.'s