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	$ 170,000	100%	$ 170,000	100%
Variable costs	85,000	50	51,000	30
Contribution margin	$ 85,000	50%	$ 119,000	70%
Fixed costs	23,800		50,800
Operating profit	$ 61,200		$ 68,200

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 15% in the next year but that everything else remains constant. Calculate the percentage increase in profit for each company.