An investment banker is analyzing two companies that specialize in the production and sale of gourmet coffee and tea mixes. The first company, Freshest uses a labour-intensive approach, while Gently Stirred uses a mechanized system. CVP income statements for the two companies are shown below: Freshest Gently Stirred Sales $1,000,000 $1,000,000 Variable costs 700,000 250,000 Contribution margin 300,000 750,000 Fixed costs 150,000 600,000 Operating income $_150,000 $ 150,000 The investment banker is interested in purchasing one of these companies. However, she is concerned about the effect that each company's cost structure might have on its profitability. Instructions (Show work) a) Calculate each company's degree of operating leverage. (2 Marks) b) Determine each company's operating income if sales: i) decrease by 10% (2 Marks) ii) increase by 20% (2 Marks) (Do not prepare income statements for part B. If an income statement is prepared no marks will be awarded)