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Based on the income statements of the three following retail businesses, which company has the highest operating leverage? Alpha Company Beta Company Gamma Company Revenue 200,000 200,000 200,000 Variable Costs -95,000 -155,000 -125,000 Contribution Margin 105,000 45,000 75,000 Fixed Costs -80,000 -20,000 -50,000 Net Income 25,000 25,000 25,000 a. Alpha Company b. Beta Company c. Gamma Company d. They all have the same operating leverage

Based on the income statements of the three following retail businesses, which company has the highest operating leverage? Alpha Company Beta Company Gamma Company Revenue 200,000 200,000 200,000 Variable Costs -95,000 -155,000 -125,000 Contribution Margin 105,000 45,000 75,000 Fixed Costs -80,000 -20,000 -50,000 Net Income 25,000 25,000 25,000 a. Alpha Company b. Beta Company c. Gamma Company d. They all have the same operating leverage

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 16E
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Based on the income statements of the three following retail businesses, which company has the highest operating leverage? Alpha Company Beta Company Gamma Company Revenue 200,000 200,000 200,000 Variable Costs -95,000 -155,000 -125,000 Contribution Margin 105,000 45,000 75,000 Fixed Costs -80,000 -20,000 -50,000 Net Income 25,000 25,000 25,000 a. Alpha Company b. Beta Company c. Gamma Company d. They all have the same operating leverage
Transcribed Image Text:Based on the income statements of the three following retail businesses, which company has the highest operating leverage? Alpha Company Beta Company Gamma Company Revenue 200,000 200,000 200,000 Variable Costs -95,000 -155,000 -125,000 Contribution Margin 105,000 45,000 75,000 Fixed Costs -80,000 -20,000 -50,000 Net Income 25,000 25,000 25,000 a. Alpha Company b. Beta Company c. Gamma Company d. They all have the same operating leverage
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