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Question 13 The following CVP income statements are available for Oldham Company and Newton Company: Sales revenue Variable costs Contribution margin Fixed costs Operating income

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Question 13 The following CVP income statements are available for Oldham Company and Newton Company: Sales revenue Variable costs Contribution margin Fixed costs Operating income Oldham Company $370,000 222,000 148,000 98,000 Newton Company $370,000 74,000 296,000 246,000 $50,000 $50,000 Calculate the break-even point in dollars and the margin of safety ratio for each company. (Round break- even point to the nearest whole dollar, e.g. 5,275 and margin of safety ratio to 2 decimal places, e.g. 15.25%.) Oldham Company Newton Company Break-even point Margin of safety ratio % % LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Calculate the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 15.25.) Oldham Company Newton Company Assuming that sales revenue increases by 20%, prepare a variable cost income statement for each company. Oldham Company Newton Company LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Assuming that sales revenue decreases by 20%, prepare a variable cost income statement for each company. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Oldham Company Newton Company $ $

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