Case Understanding the effects of operating leverage HighTech Inc. and OldTime Co$.$ compete within the

$12\mathrm{.}34$ same industry and had the following operating results in $2022$:

LO $12-$

Required:

a$.$ Calculate the breakeven point for each firm in terms of revenue.

b$.$ What observations can you draw by examining the breakeven point of each firm given that they earned

an equal amount of operating income on identical sales volumes in $2022?$

c$.$ Calculate the amount of operating income $($or loss$)$ that you would expect each firm to report in $2023$ if

sales were to

Increase by $20\%.$

Decrease by $20\%.$

d$.$ Using the amounts computed in requirement c$,$ calculate the increase or decrease in the amount of

operating income expected in $2023$ from the amount reported in $2022.$

e$.$ Explain why an equal percentage increase $($or decrease$)$ in sales for each firm would have such differing

effects on operating income.

f$.$ Calculate the ratio of contribution margin to operating income for each firm in $2022.($Hint: Divide

contribution margin by operating income.$)$

g$.$ Multiply the expected increase in sales of $20\%$ for $2023$ by the ratio of contribution margin to operating

income for $2022$ computed in requirement $f$ for each firm. $($Hint: Multiply your answer in requirement $f$ by

$0\mathrm{.}2.)$

h$.$ Multiply your answer in requirement $g$ by the operating income of $$42,000$ reported in $2022$ for each firm.

Provide written responses to each question in an attending MS Word document.