Refer to the information in E6-14 for Remo Company and Angelo Inc. Required: 1. Calculate each companys

Refer to the information in E6-14 for Remo Company and Angelo Inc.

Required:
1. Calculate each company’s degree of operating leverage.
2. Explain why companies with the same total sales and net operating income can have different degrees of operating leverage.
3. Compare these two companies’ vulnerability to marketfluctuations.

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Remo Co Angelo Inc. $275,000 125,000 150,000 110,000 $40,000 Sales revenue Less: Variable costs $275,000 200,000 75,000 35,000 40,000 Contribution margin Less: Fixed costs Net operating income