SunRise Inc. and SunSet Inc. have the following operating data: Print Item SunRise Inc. SunSet Inc Sales $ 3,125,000 $ 8,400,000 Variable costs (1,875,000) (5,000,000) Contribution margin $ 1,250,000 $ 3,400,000 Fixed costs (750,000) (2,400,000) Operating income $ 500,000 $ 1,000,000 a. Compute the operating leverage for SunRise Inc. and SunSet Inc. If required, round to one decimal place. SunRise Inc. 2.5 SunSet Inc. 3.4 b. How much would operating income increase for each company if the sales of each increased by 25%? If required, round to one decimal place. Dollars Percentage SunRise Inc. 312,500 % SunSet Inc. 850,000 % c. Why is there a difference operating income the two companies? SunSet Inc.'s higher operating leverage means that there are proportionately more fixed costs in its cost structure than variable costs. As such, its contribution margin per unit is higher Each additional unit sold by SunSet has a greater impact on operating income than does each additional unit sold by SunRise