TastyKreme and Krispy Kake 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:

	TastyKreme	Krispy Kake
Estimated sales in units	20,000	15,000
Unit price	6.00	8.00
Variable cost per unit	3.00	3.00
Total fixed costs	$ 30,000	$ 45,000

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.)

TastyKreme and Krispy Kake 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: 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.)