Compute the operating leverage for beck inc and bryant inc

Assignment Help Accounting Basics
Reference no: EM133135264

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


Beck Inc.

Bryant Inc.

Sales

$275,900

$869,000

Variable costs

110,700

521,400

Contribution margin

$165,200

$347,600

Fixed costs

106,200

189,600

Income from operations

$59,000

$158,000

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.

Reference no: EM133135264

Questions Cloud

Address environmental issues : The role of HRM has since been advocated to aid organizations' proactive attempts to address environmental issues and/or corporate social responsibility while w
Define the term non-monetary compensation : Define the term non-monetary compensation include an example.
Calculate the npv of project : The firm predicts an annual net cash inflow of $28,000. Calculate the NPV of this project if the required rate of return is 8%.
Examining how we define quality service : The reading in week one established a foundation for examining how we define quality service. We reviewed Gronroos's criteria for good perceived service, Martin
Compute the operating leverage for beck inc and bryant inc : Compute the operating leverage for Beck Inc. and Bryant Inc. How much would income from operations increase for each company if the sales of each increased
Coach employees with performance problems : Why is it important to coach employees with performance problems as well as employees who are performing well?
Conducting performance discussions : Do you see any value in Rob improving his skills at conducting performance discussions? What benefits will he or the organization realize from him investing his
Develop a crisis communication plan : Develop a crisis communication plan for the scenario that includes:
Disadvantages for delivery mode : 1. Online training delivery has become popular over the years. Why do you suppose this is the case?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd