Question 2 Multiple Products, Break-Even Analysis, Operating Leverage Carlyle Lighting Products produces two different types of lamps: a oor lamp and a desk lamp. Floor lamps sell for 3% and desk lamps sell for $32). The projected income statement for the upcoming year follows: Sales $EDD,UUD Less: 'v'ariable costs 4GB [100 Contribution margin Eb Less: Fixed costs 15D DUE] Operating income m The owner of Carlyle's estimates that Bill percent of the sales revenues will be produced by oor lamps and the remaining 4D percent by desk lamps. Floor lamps are also responsible for ED percent of the variable expenses. Of the fixed expenses, one third are common to both products, and onehalf are directly traceable to the floor lamp product line. Required: 1. Compute the sales revenue that must be earned for Carlyle to break even. 2. Compute the number of oor lamps and desk lamps that must be sold for Carlyle to break even. 3. Compute the degree of operating leverage for Carlyle Lighting Products. Now assume that the actual revenues will be 40 percent higher than the projected revenues. 4. By what percentage will prots increase with this change in sales volume? What is the theory behind the operating leverage concept