Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing their different cost structures: Angelo Inc. Remo Co $335,000 $335,000 225,000 $110,000 40, e0е $70,000 Sales revenue Less: Variable cost 135,000 $200,000 130,000 $ 70,000 Contribution margin Less: Fixed cost Net operating income Required: Calculate each company's degree of operating leverage (Round your answers to 3 decimal places.)

Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income statements for the two companies showing their different cost structures: Angelo Inc. Remo Co $335,000 $335,000 225,000 $110,000 40, e0е $70,000 Sales revenue Less: Variable cost 135,000 $200,000 130,000 $ 70,000 Contribution margin Less: Fixed cost Net operating income Required: Calculate each company's degree of operating leverage (Round your answers to 3 decimal places.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...

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Phelps Glass Inc. has reported the following financial data: net revenues of $10 million, variablecosts of $5 million, controllable fixed costs of $2 million, noncontrollable fixed costs of $1 million,and nontraceable costs of $500,000.What are the controllable margin, CPC, and operating income, respectively?a. $5,000,000; $3,000,000; $500,000b. $2,000,000; $1,500,000; $500,000c. $3,000,000; $2,000,000; $1,500,000d. $1,000,000; $2,000,000; $1,500,000
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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.
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