(Answered) Question - the cvf income statements shown below are

Accounting

Question - The CVF' income statements shown below are available For Armstrong Company and Contador Company.

	Armstrong Co.	Contador Co.
Sales	$491,000	$491,000
Variable costs	243,000	51,000
Contribution margin	248,000	440,000
Fixed costs	155,000	347,000
Net income	$93,000	$93,000

[a] Compute the degree of operating leverage for each company.

[b] Assuming that sales revenue Increases by 10%, prepare a variable costing Income statement for each company.

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