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Sales Variable costs Contribution margin Fixed costs Asha Inc. $157,000 (63,000) $94,000 (47,000) $47,000 Asha Inc. Samir Inc. Samir Inc. $437,500 (262,500) $175,000 (50,000) $125,000 Operating income a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. Samir Inc. 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. Dollars Percentage % % c. The difference in the increases ✓of operating Income is due to the difference in the operating leverages. Asha Inc.'s higher ✓operating leverage means that its fixed costs are a larger ✓percentage of contribution margin than are

Sales Variable costs Contribution margin Fixed costs Asha Inc. $157,000 (63,000) $94,000 (47,000) $47,000 Asha Inc. Samir Inc. Samir Inc. $437,500 (262,500) $175,000 (50,000) $125,000 Operating income a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. Samir Inc. 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. Dollars Percentage % % c. The difference in the increases ✓of operating Income is due to the difference in the operating leverages. Asha Inc.'s higher ✓operating leverage means that its fixed costs are a larger ✓percentage of contribution margin than are

FINANCIAL ACCOUNTING
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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Asha Inc. and Samir Inc. have the following operating data: Asha Inc. Sales Variable costs Contribution margin Fixed costs Operating income a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. Samir Inc. Asha Inc. Samir Inc. Dollars Samir Inc. $157,000 (63,000) $94,000 (47,000) $47,000 c. The difference in the increases higher Samir Inc.'s. 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.. $437,500 (262,500) $175,000 (50,000) $125,000 Percentage % % ✓of operating income is due to the difference in the operating leverages. Asha Inc.'s operating leverage means that its fixed costs are a larger ✔percentage of contribution margin than are
Transcribed Image Text:Asha Inc. and Samir Inc. have the following operating data: Asha Inc. Sales Variable costs Contribution margin Fixed costs Operating income a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. Samir Inc. Asha Inc. Samir Inc. Dollars Samir Inc. $157,000 (63,000) $94,000 (47,000) $47,000 c. The difference in the increases higher Samir Inc.'s. 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.. $437,500 (262,500) $175,000 (50,000) $125,000 Percentage % % ✓of operating income is due to the difference in the operating leverages. Asha Inc.'s operating leverage means that its fixed costs are a larger ✔percentage of contribution margin than are
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