Operating LeverageBeck Inc. and Bryant Inc. have the following operating data: Beck Inc.Bryant Inc.Sales$285,600 $760,000 Variable costs(114,600) (456,000)Contribution margin$171,000 $304,000 Fixed costs(114,000) (152,000)Operating income$57,000 $152,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.Beck Inc.fill in the blank 1Bryant Inc.fill in the blank 2b. How much would operating income increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number. DollarsPercentageBeck Inc.$fill in the blank 3fill in the blank 4%Bryant Inc.$fill in the blank 5fill in the blank 6%

Operating leverage is a cost-accounting formula that determines how much a company or project can…

Answered: Operating Leverage Beck Inc. and…

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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Operating Leverage

Beck Inc. and Bryant Inc. have the following operating data:

	Beck Inc.	Bryant Inc.
Sales	$285,600		$760,000
Variable costs	(114,600)		(456,000)
Contribution margin	$171,000		$304,000
Fixed costs	(114,000)		(152,000)
Operating income	$57,000		$152,000

a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

Beck Inc.	fill in the blank 1
Bryant Inc.	fill in the blank 2

b. How much would operating income increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number.