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HighTech Inc. and OldTime Co. compete within the same industry and had the following operating results in 2019: HighTech Inc. Sales Variable expenses Contribution margin
HighTech Inc. and OldTime Co. compete within the same industry and had the following operating results in 2019: HighTech Inc. Sales Variable expenses Contribution margin Fixed expenses Operating income $420,000 84,000 $336,000 294,000 $ 42,000 Oldtime Co. $420,000 252,000 $ 168,000 126,000 $ 42,000 Required: f. Calculate the ratio of contribution margin to operating income for each firm in 2019. g. Multiply the expected increase in sales of 20% for 2020 by the ratio of contribution margin to operating income for 2019 computed in requirement f for each firm. h. Multiply your answer in requirement g by the operating income of $42,000 reported in 2019 for each firm
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