Information for two companies follows: Skittles Company Sales Contribution margin Fixed costs $ 7,054,000 5,304,000 4,284,000...

  

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Information for two companies follows: Skittles Company Sales Contribution margin Fixed costs $ 7,054,000 5,304,000 4,284,000 Starburst Company $ 4,275,000 1,395,000 945,000 (1) Compute the degree of operating leverage (DOL) for each company. (2) Which company is expected to produce a greater percent increase in income from a 10% increase in sales? Information for two companies follows: Skittles Company Sales Contribution margin Fixed costs $ 7,054,000 5,304,000 4,284,000 Starburst Company $ 4,275,000 1,395,000 945,000 (1) Compute the degree of operating leverage (DOL) for each company. (2) Which company is expected to produce a greater percent increase in income from a 10% increase in sales?

Answer rating: 100% (QA)

To calculate the degree of operating leverage DOL for each company we can use the following ... View the full answer