I need help with these two case studies please. I just cannot seem to get them to come out, but the two WORD docs are attached.

The Power of Operating Leverage Determining variable and fixed costs leads us to our next discussion. Why bother studying these costs? To determine operating leverage To determine the company's ability to adapt to changing sales levels To find the break-even sales point. Degree of Operating Leverage The term \"operating leverage\" refers to fixed costs. Consider: High Fixed Costs = High Degree of Operating Leverage (HDOL) Low Fixed Costs = Low Degree of Operating Leverage (LDOL) Companies with high fixed costs versus variable costs have higher operating leverage. Why? Companies with a HDOL must reach a higher level of sales to cover fixed costs before profits can occur. Once sales exceed that level, profitability increases dramatically since variable expenses are much smaller than fixed costs (which have already been covered). On the other hand, companies with LDOL, will have lower fixed costs, but every dollar of sales will be chewed up by variable costs leaving a modest profit. Conclusion: Higher Leverage companies must have high level of sales compared with capacity, in order to cover all expenses (to reach breakeven). Why do lenders care about Operating Leverage? If companies with high operating leverage see a decline in sales, profits will be adversely impacted since it will be more difficult to cut expenses. Since debt service is in essence a \"fixed cost\EXERCISE - NASCAR Pretzel & Lemonade Cart Calculate breakeven, operating leverage and changes in profitability. The Problem You own and manage a pretzel and lemonade concession cart. You decide that you want to sell your products at a NASCAR race weekend in Loudon, NH. The racetrack owners let you choose one of the following rental \"options\": Low \"Overhead\" Rent - \"Commission\" of 30% of total sales High \"Overhead\" Rent - $1,000 fixed rental cost for the entire weekend Your food and beverage costs are 20% of total sales. You also have to pay an employee $400 to run the cart over the weekend. Question 1 - Find Breakeven For each scenario, calculate at what level of sales where you will reach the breakeven point. Low Overhead High Overhead Breakeven Sales Point Question 2 - Calculate Degree of Operating Leverage You estimate that your sales for the weekend will either be \"average\" or \"great\": Average: $2,800 in sales Great: 50% higher than \"average\" or $4,200 What is your degree of leverage at AVERAGE sales of $2,800 for both the low and high overhead scenario? Operating Leverage = Sales - Total Variable Cost Sales - Total Cost (Fixed and Variable) Question 3 - Calculate Profits and Increase In Profitability Calculate the profit potential for an average and great weekend for both the low overhead scenario and the high overhead scenario. Total Sales Low Overhead High Overhead Average Great % I ncr.Average Great % I ncr. 2,800 4,200 50.0% 2,800 4,200 50.0% Food/ Beverage Costs "Rent" Labor/ Employee Total Expenses Operating Profit Profits grew by how much faster than sales?: x x How much did profits increase by relative to an increase in sales for both scenarios? How does this compare with the answers you derived in question 2? Conclusion Companies with a higher fixed overhead (and hence, lower variable costs relative to fixed costs) must reach a higher level of sales prior to becoming profitable. However, they will enjoy a greater increase in profits as sales increase. High Operating Leverage Low Operating Leverage Breakeven Higher Lower Increase In Profits Faster Slower