Income statements for two different companies in the same industry are as follows: Trimax, Inc. Quintex, Inc. $500,000 Sales $400,000 200,000 100,000 $200,000 $400,000 Less: Variable costs Contribution margin Less: Fixed costs Operating income 150,000 350,000 $50,000 $50,000 Required: 1. Compute the degree of operating leverage for each company. Trimax > Quintex 2. Compute the break-even point in dollars for each company. Trimax, Inc. Quintex, Inc. Why is the break-even point for Quintex, Inc., higher? 3. Suppose that both companies experience a 40 percent increase in revenues. Compute the percentage change in profits for each company. Trimax % 200,000 100,000 Less: Variable costs Contribution margin $200,000 $400,000 350,000 $50,000 150,000 Less: Fixed costs Operating income $50,000 Required: 1. Compute the degree of operating leverage for each company Trimax Quintex 2. Compute the break-even point in dollars for each company > Trimax, Inc. Quintex, Inc. Why is the break-even point for Quintex, Inc., higher? 3. Suppose that both companies experience a 40 percent increase in revenues. Compute the percentage change in profits for each company, Trimax % Quintex %