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Compute the operating leverage for juras inc

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Reference no: EM131793499

Question - Juras Inc. and Hinson Inc. have the following operating data:

Sales 160,000 215,000

Variable costs 130,000 115,000

Contribution margin 30,000 100,000

Fixed costs 20,000 75,000

Income fromoperations 10,000 25,000

a. Compute the operating leverage for Juras Inc. and Hinson Inc.

b. How much would income from operations increase for each company if the sales of each increased by 10%?

c. Why is there a difference in the increase in income from operations for the two companies? Explain.

Reference no: EM131793499

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