Question

Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $781,000 $247,800

0 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1
a) Computation of operating leverage
Operating leverage = contribution margin/income from operation
Beck Inc = 148400/53000 = 2.8
Bryant Inc = 312400/142000 = 2.2
b) Calculation of income from operation
Particulars Beck Inc Bryant Inc
sale @ 20% increase 297360 937200
less: variable cost 20% increase 119280 562320
contribution margin 178080 374880
less: Fixed cost 95400 170400
Income from operations after increase in sale 82680 204480
less: income from operation 53000 142000
Increase in income from operation 29680 62480
Increase in percentage 56% 44%
c) The Difference in the Increase of income from operations is due to
the difference in the operating leverages Beck inc is higher operating
leverage means that its fixed costs are larger percentage of contribution
margin than bryant inc's

Please give a thumbs up if it is helpful & let me know if any doubt

Add a comment
Know the answer?
Add Answer to:
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc....

    operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $194,700 $497,000 Variable costs (78,100) (298,200) Contribution margin $116,600 $198,800 Fixed costs (63,600) (56,800) Operating income $53,000 $142,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. 2.2 Bryant Inc. 1.4 b. How much would operating income increase for each company if the sales of each increased by 10%? If required, round...

  • Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc....

    Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $1,250,000 $2,000,000 Variable costs 750,000 1,250,000 Contribution margin $500,000 $750,000 Fixed costs 400,000 450,000 Income from operations $100,000 $300,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round...

  • Operating Leverage Beck Inc. and Bryant Inc have the following operating data: Beck Inc Bryant Inc....

    Operating Leverage Beck Inc. and Bryant Inc have the following operating data: Beck Inc Bryant Inc. Sales Varlable 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. Beck Inc. $1,250,000$2.000,000 1,250,000 $500,000$750,000 750,000 400,000 $100,000 $300,000 < ) Bryant Inc. 2.5 b. How much would income from operations increase for sach company if the sales of each increased by 209%7 It required, rounid...

  • Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc....

    Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $374,100 $1,122,000 Variable costs (150,100) (673,200) Contribution margin $224,000 $448,800 Fixed costs (154,000) (261,800) Operating income $70,000 $187,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would operating income increase for each company if the sales of each increased by 15%? If required, round answers to...

  • Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $295,300...

    Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $295,300 $834,000 Variable costs 118,500 500,400 Contribution margin $176,800 $333,600 Fixed costs 124,800 194,600 Income from operations $52,000 $139,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to...

  • Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $154,300...

    Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $154,300 $392,000 Variable costs 61,900 235,200 Contribution margin $92,400 $156,800 Fixed costs 50,400 44,800 Income from operations $42,000 $112,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to...

  • Beck Inc. and Bryant Inc. have the following operating data: Beck Inc Bryant Inc. Sales Variable...

    Beck Inc. and Bryant Inc. have the following operating data: Beck Inc Bryant Inc. Sales Variable costs Contribution margin Fixed costs Income from operations $1,250,000 $2,000,000 750,000 1,250,000 $750,000 450,000 $500,000 400,000 $100,000 a. Compute the operating leverage for Beck Inc. and Brvant Inc. If required, round to one decimal place Beck Inc. Bryant Inc. b. How much would income from 2.5 V operations increase for each company if the sales of each increased by 20%, tf required, round a...

  • Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $243,200...

    Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $243,200 $625,500 Variable costs (97,600) (375,300) Contribution margin $145,600 $250,200 Fixed costs (93,600) (111,200) Operating income $52,000 $139,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would operating income increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole...

  • uoW.ntm mapter 19 Homework eBook Calculator Operating Leverage Beck Inc. and Bryant Inc. have the following...

    uoW.ntm mapter 19 Homework eBook Calculator Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $368,700 $1,196,000 Variable costs 147,900 717,600 Contribution margin $220,800 $478,400 Fixed costs 151,800 294,400 Income from operations $69,000 $184,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place Beck Inc. 3.2 Bryant Inc. 2.6 b. How much would income from operations increase for each company if the sales...

  • Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc....

    Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $315,300 $1,027,000 Variable costs 126,500 616,200 Contribution margin $188,800 $410,800 Fixed costs 129,800 252,800 Income from operations $59,000 $158,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 10%? If required, round...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT