Varner Inc. and King Inc. have the following operating data:

a$.$ Compute the operating leverage for Varner Inc. and King Inc. If required, round to one decimal place.

Varner Inc.

King Inc.

b$.$ How much would income from operations increase for each company if the sales of each increased by $10\%?$ If required, round answers to nearest whole number.

c$.$ The difference in the $($increases$/$decreases$)$

of income from operations is due to the difference in the operating leverages. Varner Inc.$\text{'}$s $($higher$/$lower$)$ operating leverage means thst its

fixed costs are a

percentage of contribution margin than are King Inc.$\text{'}$s$.$

operating leverage means that its fixed costs are a $($larger$/$smaller$)$ percentage of contribution margin than are king inc.$\text{'}$s