Question: Understanding effects of operating leverage High Tech, Corporation, and Old Time Company compete within the same industry & had the following operating results in 2008:
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High Tech
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Old Time Co.
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Sales........................................
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$2,100,000
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$2,100,000
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Variable expenses.....................
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420,000
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1,260,000
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Contribution Margin.........
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$1,680,000
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$840,000
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Fixed expenses..................
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1,470,000
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630,000
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Operating income..................
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$210,000
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$210,000
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Required:
Determine the break-even point for each company in terms of revenue;
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High Tech
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Old Time Co.
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Sales........................................
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100%
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100%
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Variable expenses.....................
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Contribution Margin.........
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Fixed expenses..................
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Operating income..................
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