company a and company b have a plan that allows a customer to download music.
company a charges a one time $5 membership fee, and each song costs .75
company b does not charge a membership fee, and each song costs $1
how many songs would need to be downloaded so that the costs for company a’s plan and company b’s plan are equal?
Company A is a manufacturer with current sales of $6,000,000 and 60% contribution margin. Its fixed costs equal $2,600,000. Company B is a consulting firm with current service revenues of $4,500,000 and a 25% contribution margin. Its fixed costs equal $375,000. Compute the degree of operating leverage (DOL) for each company.
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