Asha Inc. and Samir Inc. have the following operating data:

a. Compute the operating leverage for Asha Inc. and Samir Inc.
b. How much would operating income increase for each company if the sales of each increased by 30%?
c. Why is there a difference in the increase in operating income for the two companies? Explain.

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Sales Variable costs Contribution margin Fixed costs Operating income Asha Inc. $ 2,500,000 (1,500,000) $ 1,000,000 (800,000) $ 200,000 Samir Inc. $ 4,000,000 (2,500,000) $1,500,000 (900,000) $ 600,000