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m/ilm/takeAssignment/takeAssignmentMain.do?invoker assignments&takeAssignmentSessionlLocator-assignment-take; eBook Calculator Print ltem Beck Inc. and Bryant Inc, have the following operating data: Beck Inc. $138,300 55,500 $82,800 36,800 46,000 Bryant Inc 369,000 221,400 147,600 Sales Variable costs Contribution margin Fixed costs Income from operations a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. 24,600 $123,000 Beck Inc. Bryant Inec ) b. How much would income from operations increase for each company if the sales o, each increased by 10%? r required, round answers to nearest whole number Dollars Percentage Beck Inc. Bryant Inc. c. The difference in the of income from operations is due to the differance in the operating leverages. Beck Inc.'s HEET . operating leverage means that its fixed costs are a percentage or contribution margin than are Bryant Inc.'s

Explanation / Answer

Req a: Beck Inc Bryant Inc Contribution income 82800 147600 Divide: Net income 46000 123000 Operating Leverage 1.8 1.2 Req b: Sales increase by 10% Profits increasse by: Beck Inc: 10*1.8= 18% Amount of increase: 46000*18%= 8280 Bryant Inc: 10*1.2 = 12% Amount of Increase: 123000*12% = 14760 Reqc: The difference in two companies of income from operations is due to difference in operating leverage. Beck Inc is higher operating leverage means that its fixed cost are a hgher % of contribution margin than are Bryant inc.

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