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The single-column CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $500,000 $500,000 Variable costs 240,000
The single-column CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $500,000 $500,000 Variable costs 240,000 50,000 Contribution margin 260,000 450,000 Fixed costs 160,000 350,000 Net income $100,000 $100,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Armstrong Degree of Operating Leverage Contador (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-column CVP income statement for each company. SA Armstrong Company Contador Company $
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