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Make the use of operating leverage employed

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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

Problem 1: Compare the two companies. What conclusions could you make regarding the use of operating leverage employed by the two firms?

Reference no: EM132905546

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