Part 2 Craft Company and Jarmer Company each have sales of $200,000 and costs of $140,000. Craft Company's costs consist of $40,000 fixed and $100,000 variable, while Jarmer Company's costs consist of $100,000 fixed and $40,000 variable.

(a)Prepare contribution margin income statements and compute the degree of operating leverage for each company

(b) Which company will suffer the greatest decline in income if sales volume declines by 15%? By how much will each companys income decline?