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P6.5A (LO 4), AN Writing The following CVP income statements are available for Blanc Company and Noir Company. Instructions a. Compute the break-even point in
P6.5A (LO 4), AN Writing The following CVP income statements are available for Blanc Company and Noir Company. Instructions a. Compute the break-even point in dollars and the margin of safety ratio (round to 3 places) for each company. b. Compute the degree of operating leverage for each company and interpret your results. c. Assuming that sales revenue increases by 20%, prepare a CVP income statement for each company. d. Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. e. Discuss how the cost structure of these two companies affects their operating leverage and profitability. Compute degree of operating leverage and evaluate impact of operating leverage on financial results. a. BE, Blanc \$386,364 BE, Noir $421,875 b. DOL, Blanc 4.4 DOL, Noir 6.4
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