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- Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company Bs fixed costs are $375,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 15% increase in sales? Explain why.Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
- Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200Snellville Co. reports the following data: Sales $687,100 Variable costs 474,100 Contribution margin $213,000 Fixed costs 170,400 Income from operations $42,600 Determine Snellville Company's operating leverage. Round your answer to one decimal place.fill in the blank 1Teague Co. reports the following data: Sales $489,300 Variable costs 278,900 Contribution margin $210,400 Fixed costs 170,700 Income from operations $39,700 Determine Teague Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1
- Tucker Co. reports the following data: Line Item Description Amount Sales $911,900 Variable costs (611,000) Contribution margin $300,900 Fixed costs (219,600) Operating income $81,300 Determine Tucker Co.’s operating leverage. Round your answer to one decimal place.fill in the blank 1 of 1Operating Leverage Westminster Co. reports the following data: Sales $875,000 Variable costs 425,000 Contribution margin $450,000 Fixed costs 150,000 Income from operations $300,000 Determine Westminster Co.'s operating leverage. Round your answer to one decimal place.Snellville Co. reports the following data: Line Item Description Amount Sales $673,800 Variable costs (377,300) Contribution margin $296,500 Fixed costs (214,100) Operating income $82,400 Determine Snellville Co.’s operating leverage. Round your answer to one decimal place. fill in the blank 1 of 1
- Tucker Company reports the following data: Sales $415,400 Variable costs 278,300 Contribution margin $137,100 Fixed costs 112,200 Income from operations $24,900 Determine Tucker Company's operating leverage. Round your answer to one decimal place.fill in the blank 1Operating Leverage Haywood Co. reports the following data: Sales $6,160,000 Variable costs (4,620,000) Contribution margin $1,540,000 Fixed costs (440,000) Operating income $1,100,000 Determine Haywood Co.’s operating leverage. Round your answer to one decimal place.Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $326,000 $978,000 Variable costs 130,800 586,800 Contribution margin $195,200 $391,200 Fixed costs 134,200 228,200 Income from operations $61,000 $163,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2 b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 % c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s.
