Information for two companies follows: Skittles Company Starburst Company Sales $ 5,857,600 $ 3,981,000 Contribution margin 4,617,600
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Information for two companies follows:
| Skittles Company | Starburst Company | |
|---|---|---|
| Sales | $ 5,857,600 | $ 3,981,000 |
| Contribution margin | 4,617,600 | 1,421,000 |
| Fixed costs | 3,655,600 | 931,000 |
(1) Compute the degree of operating leverage (DOL) for each company.
(2) Which company is expected to produce a greater percent increase in income from a 20% increase in sales?
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