Sales Contribution margin Fixed costs Skittles Company $ 4,075,600 2,595,600 1,977,600 $ 1) Compute the degree of operating leverage (DOL) for each company. 2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales? Skittles's DOL Starburst's DOL Company 3,870,000 1,350,000 810,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the degree of operating leverage (DOL) for each company. Degree of Operating Leverage Denominator: Numerator: Ratio Degree of Operating Leverage
Sales Contribution margin Fixed costs Skittles Company $ 4,075,600 2,595,600 1,977,600 $ 1) Compute the degree of operating leverage (DOL) for each company. 2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales? Skittles's DOL Starburst's DOL Company 3,870,000 1,350,000 810,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the degree of operating leverage (DOL) for each company. Degree of Operating Leverage Denominator: Numerator: Ratio Degree of Operating Leverage
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...
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![Information for two companies follows:
Sales
Contribution margin
Fixed costs
Skittles Company
$ 4,075,600
2,595,600
1,977,600
(1) Compute the degree of operating leverage (DOL) for each company.
(2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?
Starburst
Company
$ 3,870,000
1,350,000
810,000
Complete this question by entering your answers in the tabs below.
Skittles's DOL
Starburst's DOL
Required 1 Required 2
Compute the degree of operating leverage (DOL) for each company.
Degree of Operating Leverage
1
Denominator:
1
Numerator:
< Required 1
=
Ratio
Degree of Operating Leverage
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2bfa86f0-9061-4678-a412-a0eb0412be84%2F9d84806f-c913-44ab-afe4-7a3f52085270%2Fk4hfoep_processed.png&w=3840&q=75)
Transcribed Image Text:Information for two companies follows:
Sales
Contribution margin
Fixed costs
Skittles Company
$ 4,075,600
2,595,600
1,977,600
(1) Compute the degree of operating leverage (DOL) for each company.
(2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?
Starburst
Company
$ 3,870,000
1,350,000
810,000
Complete this question by entering your answers in the tabs below.
Skittles's DOL
Starburst's DOL
Required 1 Required 2
Compute the degree of operating leverage (DOL) for each company.
Degree of Operating Leverage
1
Denominator:
1
Numerator:
< Required 1
=
Ratio
Degree of Operating Leverage
Required 2 >
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