Operating Leverage Income statements for two different companies in the same industry are as follows Trimax, Inc. Quintex, Inc. Sales $500,000 $625,000 Less: Variable costs 250,000 125,000 $250,000 $500,000 Contribution margin Less: Fixed costs 200,000 450,000 Operating income $50,000 $50,000 Required: 1. Compute the degree of operating leverage for each company 5V Trimax Quintex 10 2. Compute the break-even point in dollars for each company. Trimax, Inc 400,000 450,000 X Quintex, Inc. Why is the break-even point for Quintex, Inc., higher? Because it must cover more in fixed expenses. 3. Suppose that both companies experience a 50 percent increase in revenues. Compute the percentage change in profits for each company. 200 X % Trimax Quintex 400 X%