Please given correct answer general accounting Cartersville Co. reports the following data:Sales $405,200Variable costs $251,200-Contribution margin - $154,000Fixed costs $117,300-Income from operations - $36,700Determine Cartersville Company's operating leverage.Round your answer to one decimal place

Step 1: Identify the formula for operating leverageStep 2: Substitute the given valuesStep 3:…

Answered: Cartersville Co. reports the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $295,300 $834,000 Variable costs 118,500 500,400 Contribution margin $176,800 $333,600 Fixed costs 124,800 194,600 Income from operations $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 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 of income from operations 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.
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Cartersville Co. reports the following data: Sales $405,200 Variable costs $251,200 - Contribution margin - $154,000 Fixed costs $117,300 - Income from operations - $36,700 Determine Cartersville Company's operating leverage. Round your answer to one decimal place