Exercise 6-14 a1, b (Video) Your answer is partially correct. Try again. The CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co. Sales $499,000 $499,000 46,000 Variable costs 242,000 Contribution margin 257,000 453,000 Fixed costs 157,000 353,000 $100,000 $100,000 Net income (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Armstrong 2.57 Contador 4.53 (b) Assuming that sales revenue increases by 10 % , prepare a variable costing income statement for each company Contador Company Armstrong Company Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Income/(Loss)