Operating leverage

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

Line Item Description Asha Inc. Samir Inc. Sales $331,300 $913,000 Variable costs (132,900) (547,800) Contribution margin $198,400 $365,200 Fixed costs (136,400) (199,200) Operating income $62,000 $166,000 a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. fill in the blank 1 of 2

Samir Inc. fill in the blank 2 of 2

b. How much would operating income increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number.

Company Dollars Percentage Asha Inc. $fill in the blank 3 fill in the blank 4 % Samir Inc. $fill in the blank 5 fill in the blank 6 % c. The difference in the fill in the blank 1 of 3 of operating income is due to the difference in the operating leverages. Asha Inc.'s fill in the blank 2 of 3 operating leverage means that its fixed costs are a fill in the blank 3 of 3 percentage of contribution margin than are Samir Inc.'s.