25

The following CVP income statements are available for Chantal Corp. and Mantle, Inc. Chantal Corp. Mantle, Inc. Sales $ 700,000 $ 700,000 Variable costs 350,000 210,000 Contribution margin 350,000 490,000 Fixed costs 225,000 365,000 Net income $ 125,000 $ 125,000 (a) Your answer has been saved. See score details after the due date. Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 15.5.) Degree of Operating Leverage Chantal 2.8 Mantle 3.9(b ) Assume that sales revenue decreases by 20%. Prepare a CVP income statement for each company. Chantal Corp. Mantle, Inc. $ $ v v v $ $