Income statements for two different companies in the same industry are as follows: Elgin, Inc. Hobart, Inc. Sales $600,000 $600,000 360,000 120,000 Less: Variable costs Contribution margin $240,000 $480,000 120,000 360,000 Less: Fixed costs Operating income $120,000 $120,000 Required: 1. Compute the degree of operating leverage for each company. Elgin Hobart 2. Compute the break-even point in dollars for each company. Elgin, Inc. Hobart, Inc. Why is the break-even point for Hobart, Inc., higher? 3. Suppose that both companies experience a 30 percent increase in revenues. Compute the percentage change in profits for each company. Elgin % Hobart %