(Solved by Humans)-Problem 4-52 Break-Even Sales, Operating Leverage, Change in Income Income statements for two...

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Problem 4-52        Break-Even Sales, Operating Leverage, Change in Income Income statements for two different companies in the same industry are as follows:     Duncan   Macduff Sales $375,000   $375,000 Total variable cost 300,000   150,000 Contribution margin $  75,000   $225,000 Total fixed cost 50,000   200,000 Operating income $  25,000   $  25,000     (Continued)                   Required: 1.       Compute the degree of operating leverage for each company. 2.       CONCEPTUAL CONNECTION Compute the break-even point in dollars for each com- pany. Explain why the break-even point for Macduff is higher. 3.       CONCEPTUAL CONNECTION Suppose that both companies experience a 30% increase in revenues. Compute the percentage change in profits for each company. Explain why the per- centage increase in Macduff’s profits is so much larger than that of Duncan.