Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $275,600 $882,000 Variable costs 110,600 529,200 Contribution margin $165,000 $352,800 Fixed costs 110,000 205,800 Income from operations $55,000 $147,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. 2.4 V 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. 55,000 X 55 X % Bryant Inc. $ 147,000 x 14.7 X % c. The difference in the increases v 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 v percentage of contribution margin than are Bryant Inc.'s.

Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $275,600 $882,000 Variable costs 110,600 529,200 Contribution margin $165,000 $352,800 Fixed costs 110,000 205,800 Income from operations $55,000 $147,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. 2.4 V 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. 55,000 X 55 X % Bryant Inc. $ 147,000 x 14.7 X % c. The difference in the increases v 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 v percentage of contribution margin than are Bryant Inc.'s.

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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Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $275,600 $882,000 Variable costs 110,600 529,200 Contribution margin $165,000 $352,800 Fixed costs 110,000 205,800 Income from operations $55,000 $147,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Вeck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Dollars Percentage Вeck Inc. 2$ % 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.
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