Required

a$.$ Use the contribution margin approach to compute the operating leverage for each firm.

b$.$ If the economy expands in coming years, Larson and Benson will both enjoy a $10$ percent per year increase in sales, assuming that

the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. $($Note:

Since the number of units increases, both revenue and variable cost will increase.$)$

c$.$ If the economy contracts in coming years, Larson and Benson will both suffer a $10$ percent decrease in sales volume, assuming that

the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. $($Note:

Since the number of units decreases, both total revenue and total variable cost will decrease.$)$

Complete this question by entering your answers in the tabs below.

If the economy contracts in coming years, Larson and Benson will both suffer a $10$ percent decrease in sales volume,

assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in

percentage. $($Note: Since the number of units decreases, both total revenue and total variable cost will decrease.$)$

Note: Amounts to be deducted should be indicated with a minus sign. Enter "Variable cost per unit" and "Percentage change"

amounts to $2$ decimal places. Round all other answers to the nearest whole dollar amount.

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a$.$ Use the contribution margin approach to compute the operating leverage for each firm.

b$.$ If the economy expands in coming years, Larson and Benson will both enjoy a $10$ percent per year increase in sales, assuming that

the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. $($Note:

Since the number of units increases, both revenue and variable cost will increase.$)$

c$.$ If the economy contracts in coming years, Larson and Benson will both suffer a $10$ percent decrease in sales volume, assuming that

the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. $($Note:

Since the number of units decreases, both total revenue and total variable cost will decrease.$)$

Complete this question by entering your answers in the tabs below.

If the economy contracts in coming years, Larson and Benson will both suffer a $10$ percent decrease in sales volume,

assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in

percentage. $($Note: Since the number of units decreases, both total revenue and total variable cost will decrease.$)$

Note: Amounts to be deducted should be indicated with a minus sign. Enter "Variable cost per unit" and "Percentage change"

amounts to $2$ decimal places. Round all other answers to the nearest whole dollar amount.