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Compute the operating leverage for beck inc and bryant inc

    Assignment Instructions

    Assignment ID: FG133135264

    Question – Beck Inc. and Bryant Inc. have the following operating data:

    Beck Inc.

    Bryant Inc.




    Variable costs



    Contribution margin



    Fixed costs



    Income from operations



    Required –

    a. Compute the operating leverage for Beck Inc. and Bryant Inc.

    b. How much would income from operations increase for each company if the sales of each increased by 15%?

    c. The difference in the increases/decreases 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 largersmaller percentage of contribution margin than are Bryant Inc.’s.

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