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
AddLess : 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		$		$