The CVP income statements shown below are available for two drugs manufacturing firms: Oregano Co. and Wild Plants Co. Sales Variable Costs Contribution margin Fixed Costs Net Income Oregano Co. $1,500,000 620,000 880,000 430,000 $450,000 Wild Plants Co. $1,500,000 330,000 1,170,000 720,000 $450,000 Required: (1) Compute the degree of operating leverage of each company. (2) Which company generate higher net income if sales increased by $120,000. (Show your computations). (3) Using the margin of safety ratio, determine which company could sustain the greater decline before operating at loss. Korona Corporation has collected the following information for its first year of operation 2020: Sales = $1,500,000 (100,000 units) Selling expense = $250,000 (40% variable & 60% fixed) Direct materials = $511,000 Direct labor = $290,000 Administrative expenses = $270,000 (20% variable & 80 fixed) Manufacturing overhead = $350,000 (70% variable & 30% fixed) Top management has asked you to do CVP analysis so that it can make plans for the coming year 2021. It has projected that unit sales will increase by 10% next year. Required: 1. Compute contribution margin for the current year 2020 2. Compute the contribution margin for the projected year 2021 3. Compute the fixed cost 4. Compute the BEP in units and sales for the current year 2020 5. Compute the BEP in units and sales for the current year 2021 6. The company has a target net income of $200,000 for the projected year 2021, what is the required sales in dollars for the company to meet its target? 7. If the company meets its target net income number, what is the margin of safety ratio in 2021