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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
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:
Compute the operating income and degree of operating leverage for each company. Round "Degree of
operating leverage" to decimal place.
Assuming sales volume for each company will decline by 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.
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