Choose Exercise ( 1 ONLY} COMPANY A COMPANY B SALES $80,000 SALES $80,000 TOTAL VARIABLE COSTS 20, 000 TOTAL VARIABLE COSTS 60,000 CONTRIBUTION MARGIN 60,000 CONTRIBUTION MARGIN 20,000 FIXED COSTS 50,000 FIXED COSTS 10,000 OPERATING INCOME $10,000 OPERATING INCOME $10,000 '1. Calculate the Operating Leverage Factor for each company. Operating Leverage Factor: CM/Operating Income '2. If Sales decrease by 10% for each company, by what percent will the Operating Income decrease? Hint: multiply 1 0% times the Operating Leverage Factor. Percent Decrease, Co. A |:| 0 Percent Decrease, Co. B |:| 0 '3. Operating lncome, Co. A |:| 0 Operating Income, Co. B |:| 0 Hint: to caicuiate the new Operating Income, take the percent decrease times the originai income and SUBTRACT that amount from the original income. Check: SALES $72,000 SALES $72,000 TOTAL VARIABLE COSTS 18, 000 TOTAL VARIABLE COSTS 54,000 CONTRIBUTION MARGIN 54,000 CONTRIBUTION MARGIN 18,000 FIXED COSTS 50, 000 FIXED COSTS 10,000 OPERATING INCOME $4,000 OPERATING INCOME $8,000