Compute the operating leverage for juras


Juras Inc. and Hinson Inc. have the following operatingdata:

Sales                                             160,000                      215,000

Variablecosts                                  130,000                      115,000

Contributionmargin                           30,000                        100,000

Fixedcosts                                     20,000                        75,000

Income fromoperations                     10,000                        25,000

  1. Compute the operating leverage for Juras Inc. andHinson Inc.
  2. How much would income from operations increase for eachcompany if the sales of each increased by 10%?
  3. Why is there a difference in the increase in incomefrom operations for the two companies? Explain.

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Accounting Basics: Compute the operating leverage for juras
Reference No:- TGS0722428

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