Operating Leverage Income statements for two different companies in the same industry are as follows: Elgin, Inc. Hobart, Inc. Sales $1,000,000 $1,250,000 Less: Variable costs 800,000 750,000 Contribution margin $200,000 $500,000 Less: Fixed costs 150,000 450,000 Operating income $50,000 $50,000 Required: 1. Compute the degree of operating leverage for each comparty. Elgin a 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? Contribution margin $200,000 $500,000 Less: Fixed costs 150,000 450,000 Operating income $50,000 $50,000 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.