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The following sales and cost data (in thousands) are for two companies in the transportation industry: Sales Variable costs Contribution margin Fixed costs Operating profit

The following sales and cost data (in thousands) are for two companies in the transportation industry: Sales Variable costs Contribution margin Fixed costs Operating profit Required: Company A Company B Percent Percent of of Amount Sales Amount Sales $ 260,000 130,000 100% $ 260,000 100% 50 78,000 30 $ 130,000 27,300 50% $ 182,000 70% 72,300 $ 102,700 $ 109,700 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 20% in the next year but that everything else remains constant. Calculate the percentage increase in profit for each company. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Calculate the degree of operating leverage (DOL) for each company. (Round your ans Degree of operating leverage Company A Company B < Req 1A * Req 1B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 If sales increase from the present level, which company benefits more? OCompany A Company B < Req 1A Req 2 > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Assume that sales rise 20% in the next year but that everything else remains const profit for each company. (Input your answers as percentages rounded to 2 decimal Company B Increase in profit Company A % < Req 1B % Req 2 >

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