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Compare the two companies

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Question - Assume that two companies, Brake, Inc. and Carbo, Inc., have the following operating results:

 

Brake, Inc.

Carbo, Inc.

Sales

$300,000

$300,000

Variable Costs

60,000

180,000

Fixed Costs

210,000

90,000

Operating Income

$30,000

$30,000

Required - Compare the two companies. What conclusions could you make regarding the use of operating leverage employed by the two firms?

Reference no: EM133017442

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