Question: Given below is selected information about two companies. a. Calculate net income for each company. b. What is operating leverage? Is it present in the

Given below is selected information about two companies.

a. Calculate net income for each company.
b. What is operating leverage? Is it present in the operations of these two companies? If so, which company uses the greater amount of operating leverage?
c. If sales decrease by 10%, which company will report the higher net income?
d. If sales increase by 10%, which company will report the higher netincome?

Company A CompanyB Sales Fixed costs Variable costs $10,000 4,000 5,000 $10,000 7,000 2,000

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