Problem 1. Contribution margin income statements for two competing companies are provided below: West Company South Company Revenue $ 975,000 $ 975,000 Variable Costs 420,000 682,500 Contribution margin 555,000 292,500 Fixed costs 526,500 264,000 Operating income $ 28,500 $ 28,500 Required: a. Show each company's cost structure by inserting the percentage of the company's revenue represented by each item on the contribution income statement. b. Compute each company's magnitude of operating leverage and margin of safety and explain why is important to the company managers. c. Using the operating leverage measures computed in requirement b, determine the increase in each company's net income (percentage and amount) if each company experiences a 10 percent increase in sales. d. Assume that sales are expected to continue to increase for the foreseeable future, which company probably has more desirable cost structure? Why?