Sales = 962,000, Variable Costs = 467,500, Fixed Costs = 165,000 Question:Bengal Co. reports the following data:Sales962,500Variable costs467,500Contribution margin 495,000Fixed costs165,000Income from operations 330,000Determine Bengal Co.'s operating leverage.

Explanation of Operating Leverage: This is a measure that shows how changes in sales volume affect a…

Answered: Question: Bengal Co. reports the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Sales Variable costs Contribution margin Fixed costs Operating income a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. Beck Inc. Bryant Inc. $216,400 $576,000 (86,800) (345,600) $129,600 $230,400 (75,600) (86,400) $54,000 $144,000 b. How much would operating income increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number. Beck Inc. Bryant Inc. Dollars Percentage % % c. The difference in the of operating income is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a margin than are Bryant Inc.'s. percentage of contribution

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Question: Bengal Co. reports the following data: Sales 962,500 Variable costs 467,500 Contribution margin 495,000 Fixed costs 165,000 Income from operations 330,000 Determine Bengal Co.'s operating leverage.