The following CVP income statements are available for Oldham Company and Newton Company:

Oldham Company

Newton Company

Sales revenue

$440,000

$440,000

Variable costs

220,000

88,000

Contribution margin

220,000352,000Fixed costs

170,000

302,000Operating income

$50,000

$50,000

Calculate the break-even point in dollars and the margin of safety ratio for each company. (Round break-even point to the nearest whole dollar, e.g. 5,275 and margin of safety ratio to 2 decimal places, e.g. 15.25%.)

Oldham Company

Newton Company

Break-even point

$

$

Margin of safety ratio

%

%

Calculate the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 15.25.)

Oldham Company

Newton Company

Assuming that sales revenue increases by 20%, prepare variable cost income statement for each company.

Oldham

Company

Newton

Company

$

$

:

$

$

Assuming that sales revenue decreases by 20%, prepare variable cost income statement for each company. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Oldham

Company

Newton

Company

$

$

:

$

$