Company A has current sales of $11,592,076 and a 41% contribution margin. Its fixed costs are $2,323,955. Company B is a service firm with current service revenue of $5,235,703 and a 12% contribution margin. Company B’s fixed costs are $508,666. Compute the degree of operating leverage for Company A if there was a 21% increase in sales. Round to the hundredth, two decimals.
Company A has current sales of $11,592,076 and a 41% contribution margin. Its fixed costs are $2,323,955. Company B is a service firm with current service revenue of $5,235,703 and a 12% contribution margin. Company B’s fixed costs are $508,666. Compute the degree of operating leverage for Company A if there was a 21% increase in sales. Round to the hundredth, two decimals.
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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Company A has current sales of $11,592,076 and a 41% contribution margin. Its fixed costs are $2,323,955. Company B is a service firm with current service revenue of $5,235,703 and a 12% contribution margin. Company B’s fixed costs are $508,666. Compute the degree of operating leverage for Company A if there was a 21% increase in sales. Round to the hundredth, two decimals.
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