Question 3 of 3 View Policies Current Attempt in Progress -13 An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Traditional Yams unes a labor-intensive approach, and Auto-Yams uses a mechanized system. CVP income statements for the two companies are shown below Traditional Yan Auto-Yams Sales $400,000 $400,000 Variable costs 323,000 165.000 Contribution margin 77,000 235,000 Fixed costs 27,000 185,000 Net income $50,000 $50,000 The investment banker is interested in acquiring one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability Calculate each company's degree of operating leverage (Round answers to 2 decimal places 1.15) Degree of Operating Leverage Traditional Yams Auto-Yams Determine the effect on each company's net income if sales decrease by 20% and if sales increase by & Do not prepare income statements (Round onwers to 2 decimal places, eg 10.52. if % change is negative, enter amount with either a negative signor parenthesis, eg-10.52 or (1052)) Sales decrease by 20% Traditional Yama Auto-Yam Sales increase by 8% Traditional Yaen Auto Yams % Change in Net Income