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Explain why the break-even point for macduff is higher

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Question: Break-Even Sales, Operating Leverage, Change in Income Income statements for two different companies in the same industry are as follows:

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Required: 1. Compute the degree of operating leverage for each company.

2. Conceptual Connection: Compute the break-even point for each company. Explain why the break-even point for Macduff is higher.

3. Conceptual Connection: Suppose that both companies experience a 30 percent increase in revenues. Compute the percentage change in profits for each company. Explain why the percentage increase in Macduff's profits is so much larger than that of Duncan.

Reference no: EM131673704

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