Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $243,200 $625,500
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Question:
Beck Inc. and Bryant Inc. have the following operating data:
| Beck Inc. | Bryant Inc. | |||
| Sales | $243,200 | $625,500 | ||
| Variable costs | (97,600) | (375,300) | ||
| Contribution margin | $145,600 | $250,200 | ||
| Fixed costs | (93,600) | (111,200) | ||
| Operating income | $52,000 | $139,000 | ||
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. | $ | % | |
c. The difference in the of operating income is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
Expert Answer:
Related Book For 
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
