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Business, 15.04.2020 02:59 reggiegilbert1995

Company A is a manufacturer with sales of $3,000,000 and a 60% contribution margin. Its fixed costs equal $1,320,000. Company B is a consulting firm with service revenues of $3,100,000 and a 25% contribution margin. Its fixed costs equal $270,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales.

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