Income statements for two different companies in the same industry are as follows: Sales...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Income statements for two different companies in the same industry are as follows:
Sales $ 500,000 $ 500,000
Less: Variable Costs 400,000 200,000
Contribution Margin 100,000 300,000
Less: Fixed Costs 50,000 250,000
Operating Income $ 50,000 $ 50,000
1. Calculate the degree of operating leverage for both companies.
2. Calculate the break-even point in $ for each company. Which company has the higher break-even point? Why?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.