Question

Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $336,700 $1,092,000 Variable costs 135,100 655,200 Contribution margin $201,600 $436,800 Fixed costs 138,600 268,800 Income from operations $63,000 $168,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

Answer 1

Beck Inc Operating leverage 3.2

Bryant Inc Operating leverage 2.6

Step-by-step explanation:

Computation for the operating leverage for Beck Inc. and Bryant Inc

Using this formula

Operating leverage = Contribution margin/Income from operation

Let plug in the formula

Beck Inc Operating leverage = $201,600/ $63,000

Beck Inc Operating leverage= 3.2

Bryant Inc Operating leverage= $436,800/$168,000

Bryant Inc Operating leverage= 2.6

Therefore the operating leverage for Beck Inc. and Bryant Inc are:

Beck Inc Operating leverage 3.2

Bryant Inc Operating leverage 2.6