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Question 4 of 7 -/15 5 An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Sandhill Yams

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Question 4 of 7 -/15 5 An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Sandhill Yams uses a labor-intensive approach, and Wildhorse Yams uses a mechanized system. CVP income statements for the two companies are shown below. Sandhill Yams Wildhorse Yams Sales $391,000 $391,000 Variable costs 322,000 164,000 Contribution margin 69,000 227,000 Fixed costs 19,000 177,000 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. (a1) Calculate each company's degree of operating leverage. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Sandhill Yams Wildhorse Yams

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