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Compute the degree of operating leverage for each company

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Reference no: EM133128691

Question - Both Apple and Google sell electronic devices, and each of these companies has a different product mix. Assume the following data are available for both companies.

($ millions)

Apple

Google

Sales

$260,174

$161,857

Variable costs

122,034

86,302

Fixed costs

82,884

41,212

Required -

1. Compute income for each company.

2. Compute the degree of operating leverage for each company.

3. If unit sales decline, which company would experience the larger decline in income?

Reference no: EM133128691

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