Company A and Company B are competitors in the market for a special machine part. The cost structure and price details are given below:

Example : Company A and Company Bare competitors in the market for a special machine part . The cost structure and price details are given below :" Company A Company B Selling price AED 30 AED 30 Variable cost per unit AED 10 AED 20 Fixed costs AED 60,000 AED 20,000 Question : Which firm has a high degree of operating leverage ?"C-V-P analysis of Company A and Company B Company A Units sold Variable costs |Fixed costs Total costs Revenue Operating Income (loss) 2,000 3,000 4,000 5,000 Company B Units sold Variable costs |Fixed costs Total costs Revenue Operating Income (loss) 0 2,000 3,000 4,000 5,000 Calculations of "Degree of Operating Leverage"