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Juras Inc. and Hinson Inc. have the following Operating Data:
Juras Hinson
Sales $160,000 $215,000
Variable Costs 130,000 115,000
Contribution Margin $30,000 $100.000
Fixed Costs 20,000 75,000
Income from Operations $10,000 $ 25,000
a. Compute the operating leverage for Juras Inc. and HinsonInc.
b. How much would income from operations increase for each companyif the sales of each increased by 10%??
c. Why is there a difference in the increase in income fromoperations for the two companies? Explain.
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