HighTech, Inc., and OldTime Co. compete within the same industry and had the following operating results in 2015:

	HighTech, Inc.				OldTime Co.
Sales	$	2,800,000			$	2,800,000
Variable expenses		560,000				1,680,000
Contribution margin	$	2,240,000			$	1,120,000
Fixed expenses		1,820,000				700,000
Operating income	$	420,000			$	420,000

f. Calculate the ratio of contribution margin to operating income for each firm in 2015. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

g. Multiply the expected increase in sales of 20% for 2016 by the ratio of contribution margin to operating income for 2015 computed in requirement f for each firm. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

h. Multiply your answer in requirement g by the 2015 operating income given in the problem. (Do not round intermediate calculations.)

i. Compare your answer in requirement h with your answer in requirement d. What conclusions can you draw about the effects of operating leverage from the steps you performed in requirement f, g, and h?