Exercise #6 Margin of Safety and Operating Leverage: Income statements for two different companies in the same industry are as follows:

	Company A	Company B
Revenues	$400,000	$400,000
Less: Variable Costs	300,000	200,000
Contribution Margin	$100,000	$200,000
Less: fixed costs	50,000	150,000
Operating Income	$50,000	$50,000

A. Calculate the margin of safety in dollars for each firm. B. Determine the operating income for each firm if sales increase by 20%.