Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company Bs fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales?

a.Company As operating leverage is 3, and Company Bs is 2, so Company B will benefit most from an increase in sales.

b.Company As operating leverage is 3, and Company Bs is 2, so Company A will benefit most from an increase in sales.

c.Company As operating leverage is 2, and Company Bs is 3, so Company A will benefit most from an increase in sales.

d.Company As operating leverage is 2, and Company Bs is 3, so Company B will benefit most from an increase in sales.