3. You are analyzing Barroz Corporation and Newton Corporation and have concluded that Barroz has a higher operating leverage factor than Newton. Which one of the following choices correctly depicts (1) the formula for operating leverage and (2) the percentage change in income caused by a change in sales? Formula for operating leverage Percentage Change in Income Caused by a Change in Sales a. Contribution margin/operating income Greater for Barroz b Contribution margin/fixed cost Lower for Barroz C. Sales/operating income Lower for Barroz d. Sales/fixed cost Greater for Barroz 4. Metalica Company applies overhead based on machine hours. At the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was: a. $0.05 per machine hour. b. $20 per machine hour. c. $21 per machine hour. d. $25 per machine hour. 5. Refer to the question above, at the end of year overhead must be a. Overapplied by $125,000. b. Overapplied by $100,000. c. Underapplied by $125,000. d. Underapplied by $100,000