Operating Leverage Assignment | Homework For You
Freduire Manufacturers presents” aria-describedby=”g1d”> REQUIRED To break even with this sales mix, Imany units of each product must Levettes selr? 3>Freduire Manufacturers presents the following CVP income statement in comparison to P-Quick Companys CVP income statement P-Quick Company Freduire Manufacturers $4,000,000 $3.000,000 Sales 400,000 960.000 Variable Costs 3,600,000 2,040,000 800,000 Contribution Margin 2,050,000 Fixed Costs $1, 550,000 $1.240,000 Net Income
1. What is the operating leverage for the companies?
2. Using the operating leverage computed in # 1, compare the companies to each other
3. What will happen if the sales revenue decreases by 10 % for both companies? What will a CVP income statement reveal? 2 3 Will one company be wors