Income statements for two different companies in the same industry are as follows:

DuncanMacduffSales$375,000$375,000Total variable cost300,000150,000Contribution margin$75,000$225,000Total fixed cost50,000200,000Operating income$25,000$25,000Required:

1.Compute the degree of operating leverage for each company.

DuncanMacduff2.Conceptual Connection: Compute the break-even point in dollars for each company. Round to the nearest dollar.

Duncan$Macduff$3.Conceptual Connection: Suppose that both companies experience a 30% increase in revenues. Compute the percentage change in profits for each company.

Duncan %Macduff %