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TastyKreme and Krispy Ka ke are both producers of baked goods, but each has followed a different production strategy. The differences in their strategies resulted
TastyKreme and Krispy Ka ke are both producers of baked goods, but each has followed a different production strategy. The differences in their strategies resulted in differences in their cost structure, as shown in the following table: TastyKreIne Krispy Kake Estimated sales in units 24,666 19,666 Unit price 8 6 Variable cost per' unit 5 1 Total fixed costs $ 36,666 $ 57,666 Required: 1. Compute the operating income and degree of operating leverage for each company. (Round "Degree of operating leverage" to 1 decimal place.) 2. Assuming sales volume for each company will decline by 10% and that their cost structures will not change, compute the percentage and dollar amount of the change in operating income for each company. (Negative values should be indicated by a minus sign.) Operating income Degree of operating leverage 2. Percentage change in operating income Dollar change in operating income
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