Question: Question Content Area Operating leverage Asha Inc. and Samir Inc. have the following operating data: Line Item DescriptionAsha Inc.Samir Inc.Sales$143,600$345,000Variable costs(57,600)(207,000)Contribution margin$86,000$138,000Fixed costs(43,000)(23,000)Operating income$43,000$115,000 a.
Question Content Area Operating leverage Asha Inc. and Samir Inc. have the following operating data: Line Item DescriptionAsha Inc.Samir Inc.Sales$143,600$345,000Variable costs(57,600)(207,000)Contribution margin$86,000$138,000Fixed costs(43,000)(23,000)Operating income$43,000$115,000 a. Compute the operating leverage for Asha Inc. and Samir Inc. If required, round to one decimal place. Asha Inc. fill in the blank 1 of 2 Samir Inc. fill in the blank 2 of 2 b.How much would operating income increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. CompanyDollarsPercentageAsha Inc.$fill in the blank 3fill in the blank 4%Samir Inc.$fill in the blank 5fill in the blank 6% c. The difference in the fill in the blank 1 of 3 increasesdecreases of operating income is due to the difference in the operating leverages. Asha Inc.'s fill in the blank 2 of 3 higherlower operating leverage means that its fixed costs are a fill in the blank 3 of 3 largersmaller percentage of contribution margin than are Samir Inc.'s.
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