Operating leverage

Asha Inc. and Samir Inc. have the following operating data:

a$.$ Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place.

Asha Inc.

Samir Inc.

b$.$ How much would operating income increase for each company if the sales of each increased by $15\%?$ If required, round answers to nearest whole number.

c$.$ The difference in the

of operating income is due to the difference in the operating leverages. Asha Inc.$\text{'}$s

operating leverage means that its fixed costs are a

percentage of contribution margin than are Samir Inc.$\text{'}$s$.$