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

Oldham Company Newton Company

Sales revenue $420,000 $420,000

Variable costs 210,000 84,000

Contribution margin 210,000 336,000

Fixed costs 160,000 286,000

Operating 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 ($) $320,000 $357,500

Margin of safety ratio (%) 23.80 % 14.88 %

Question Part Score

--/4

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

Oldham Company Newton Company

4.20 6.72

Question Part Score

--/2

Assuming that sales revenue increases by20%, prepare variable cost income statement for each company.

Oldham Company Newton Company

jQuery224044341429606307714_1601417204399???

Question Part Score

--/16

Assuming that sales revenue decreases by20%, 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

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