Based on the Income Statements of the Three Following Retail

Based on the income statements of the three following retail businesses,which company has the highest operating leverage? $\begin{array}{c}\begin{array}{l}\\\\\text {Revenue}\\ \text {Variable costs}\\\text { Contribution margin }\\\text {Fixed costs}\\ \text {Net income}\\\end{array} \begin{array}{lll}\text { Alpha}\\\text { Company}\\200,000 \\(95,000) \\\$ 105,000 \\(80,000) \\\$ 25,000\end{array}\begin{array}{c}\\\text { Beta Company } \\\$ 200,000 \\ (155,000) \\\$ 45,000 \\ (20,000) \\ \$ 25,000\end{array}\begin{array}{cc}\text { Gamma}\\\text { Company}\\\$ 200,000 \\ (125,000) \\ \$ 75,000 \\ (50,000) \\\$ 25,000\end{array}\end{array}$

A) Alpha Company
B) Beta Company
C) Gamma Company
D) They all have same operating leverage

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free