i) The following income statement is provided for Vargas, Inc.

Sales revenue (3,300 units $20.80 per unit)	$68,640
Cost of goods sold (Variable; 3,300 units $10.80 per unit)	35,640
cost of goods sold (fixed)	4,800
Gross margin	28,200
Administrative salaries	6,800
Depreciation	5,800
Supplies (3,300 units $2.80 per unit)	9,240
Net income	$6,360

What is this company's magnitude of operating leverage? (round your answer to 2 decimal places.)

a) 4.43

b) 0.24

c) 3.74

d) 0.23

ii) The following income statement is provided for Ramirez Company in 2012:

Sales revenue (1,700 units $19.20 per unit)	$32,640
Cost of goods sold (variable; 1,700 units $7.20 per unit)	(12,240)
Cost of goods sold (fixed)	(3,200)
Gross margin	17,200
Administrative salaries	(5,200)
Depreciation	(3,200)
Supplies (1,700 units $1.20 per unit)	(2,040)
Net income	$6,760

What amount was the company's contribution margin?

a) $20,400

b) $17,200

c) $18,360

d) $6,760