Income statements for two different companies in the same industry are as follows: company a company bsales $ 500,000 $ 500,000less: variable costs 400,000 200,000contribution margin 100,000 300,000less: fixed costs 50,000 250,000operating income $ 50,000 $ 50,000calculate the degree of operating leverage for both companies.2.calculate the break-even point in $ for each company. which company has the higher break-even point? why? 3.suppose both companies experience a 50% increase in sales. calculate the percentage change in profits for each company. explain why the percentage increase in company b�s profits are so much larger than company a�s.
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