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Information for two companies follows: Skittles Company Starburst Company Sales $ 6 , 0 0 0 , 0 0 0 $ 4 , 5 0

Information for two companies follows:
Skittles Company Starburst Company
Sales $ 6,000,000 $ 4,500,000
Contribution margin 3,600,0001,125,000
Fixed costs 2,600,000375,000
(1) Compute the degree of operating leverage (DOL) for each company.
(2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?

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