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Exercise 19-16 a1, b (Video) (Part Level Submission) An investment banker is analyzing two companies that specialize in the production and sale of candied yams.

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Exercise 19-16 a1, b (Video) (Part Level Submission) An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Traditional Yams uses a labor-intensive approach, and Auto-Yams uses a mechanized system. CVP income statements for the two companies are shown below. Auto-Yams Sales Variable costs Contribution margin Fixed costs Traditional Yams $391,000 322.000 69,000 19,000 $50,000 $391,000 164,000 227,000 177,000 $50,000 Net income The investment banker is interested in acquiring one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability. (al) Calculate each company's degree of operating leverage. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Traditional Yams Auto-Yams

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