Net Operating Income Assignment
February 18th, 2020
Chicago | Washington | |||
Sales | 20,000,000 | 20,000,000
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Variable Costs | 15,000,000 | 7,000,000 | ||
Contribution Margin | 5,000,000 | 13,000,000 | ||
Fixed Costs | 4,000,000 | 12,000,000 | ||
Operating Income | 1,000,000 | 1,000,000 | ||
1. Compute the operating leverage. | ||||
2. Assume sales increase by 20%. What is the net operating income for each firm? | ||||
3. Assume sales decrease by 10%. What is the net operating income for each firm? |
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