View Policies Current Attempt in Progress An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Traditional Yams uses a labor-intensive approach, and Auto-Yams uses a mechanized system. CVP income statements for the two companies are shown below. Traditional Yams Auto-Yams Sales Variable costs $400,000 $400,000 320,000 160,000 Contribution margin 80,000 240,000 Fixed costs 30,000 190,000 Net income $50,000 $50,000 The investment banker is interested in acquiring one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability. Degree of Operating Leverage Traditional Yams 1.60 Auto-Yams 4.80