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 10%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. 0% Bryant Inc. %

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 25E
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Beck Inc. and Bryant Inc. have the following operating data:

  Beck Inc. Bryant Inc.
Sales $170,300   $408,000  
Variable costs 68,300   244,800
Contribution margin $102,000   $163,200  
Fixed costs 51,000   27,200
Income from operations $51,000   $136,000  

a. (pictured)

b. (pictured)

c.  The difference in the (increase/decrease) of income from operations is due to the difference in the operating leverages. Beck Inc.'s (higher/lower) operating leverage means that its fixed costs are a (larger/smaller) percentage of contribution margin than are Bryant Inc.'s.

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 10%? If required, round answers to nearest whole number.
Dollars
Percentage
Beck Inc.
%
Bryant Inc.
%
Transcribed Image Text: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 10%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. % Bryant Inc. %
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