SunRise Inc and SunSet Inc have the following operating

data Su #8900
SunRise Inc. and SunSet Inc. have the following operating data:.................................SunRise
Inc. ......................... SunRise Inc.Sales ........................ $3,125.000 ..............................
$8,400,000Variable Costs ............ (1,875,000) .............................. (5,000,000)Contribution
margin ..... $ 1,250,000 ............................... (2,400,000)Operating income ........ $ 500,000
................................ $ 1,000,000a. Compute the operating leverage for SunRise Inc. and
SunSet Inc.b. How much would operating income increase for each company if the sales of
each increased by 25%?c. Why is there a difference in the increase in operating income for the
two companies? Explain.View Solution:
SunRise Inc and SunSet Inc have the following operating data Su

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