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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

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 $

$

Margin of safety ratio

%

%

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

Newton Company

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

Fixed costsContribution marginSalesVariable costsOperating income

$

$

Fixed costsOperating incomeSalesVariable costsContribution margin

Operating incomeVariable costsFixed costsSalesContribution margin

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:

Fixed costsContribution marginOperating incomeSalesVariable costs

SalesFixed costsContribution marginOperating incomeVariable costs

$

$

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Assuming that sales revenue decreases by 20%, prepare a 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

Fixed costsOperating incomeSalesVariable costsContribution margin

$

$

Fixed costsOperating incomeSalesVariable costsContribution margin

Fixed costsSalesContribution marginOperating incomeVariable costs

AddLess

:

SalesVariable costsFixed costsContribution marginOperating income

Fixed costsSalesVariable costsOperating incomeContribution margin

$

$

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