The CVP income statements shown below are available for Armstrong Company and Contador Company. Contador Co. Sales Variable costs Contribution margin Fixed costs Net income Armstrong Co. $500,000 240,000 260,000 160,000 $100,000 $500,000 50,000 450,000 350,000 $100,000 Degree of operating leverage for each company is as follows: Degree of Operating Leverage 2.6 4.5 Armstrong Contador Assuming that sales revenue increases by 10%, the variable costing income statement for each company is as follows: Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Income Armstrong Company Contador Company $550,000 $550,000 264,000 55,000 286,000 495,000 160,000 350,000 $126,000 $145,000 Discuss the differences in operating leverage for the two companies. LINK TO TEXT Discuss how the cost structure of these two companies affects their operating leverage and profitability