The following sales and cost data (in thousands) are for two companies in the transportation industry:

	Company A								Company B
	Amount				Percent of Sales				Amount				Percent of Sales
Sales	$	110,000				100	%		$	110,000				100	%
Variable costs		55,000				50				22,000				20
Contribution margin	$	55,000				50	%		$	88,000				80	%
Fixed costs		20,900								35,900
Operating profit	$	34,100							$	52,100

Required:

1-a. Calculate the degree of operating leverage (DOL) for each company.

1-b. If sales increase from the present level, which company benefits more?

2. Assume that sales rise 5% in the next year but that everything else remains constant. Calculate the percentage increase in profit for each company.