E19.14 (LO 4) The CVP income statements shown below are available for Armstrong Company and Contador Company Armstrong Co. Contador Co. Sales $500,000 S500,000 Variable costs 240.000 50.000 Contribution margin 260.000 450,000 Fixed costs 160,000 350,000 Net income $100,000 S100,000 Instructions a. Compute the degree of operating leverage for each company and interpret your results. b. Assuming that sales revenue increases by 10%, prepare a variable costing income statement for each company c. Discuss how the cost structure of these two companies affects their operating leverage and profitability, BE19.11 (LO 3) In Marshall Company, data concerning two products are unit contribution margin- Product A $10, Product B $12; machine hours required for one unit-- Product A 2, Product B 3. Com pute the contribution margin per unit of limited resource for each product