The following CVP income statements are available for ABC Company and XYZ Company. ABC Company XYZ...

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The following CVP income statements are available for ABC Company and XYZ Company. ABC Company XYZ Company CVP I/S for 2020 CVP I/S for 2020 Sales $500,000 300,000 200,000 180,000 $500,000 180,000 320,000 300,000 $ 20,000 Variable costs Contribution margin Fixed costs Operating income $ 20,000 (a) Compute the break-even point in dollars and the margin of safety ratio for each company. (b) Compute the degree of operating leverage for each company. (c) Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (d) Assuming that sales revenue increases by 20%, calculate the operating incomes of the two companies without preparing income statement. (Use DOL) The following CVP income statements are available for ABC Company and XYZ Company. ABC Company XYZ Company CVP I/S for 2020 CVP I/S for 2020 Sales $500,000 300,000 200,000 180,000 $500,000 180,000 320,000 300,000 $ 20,000 Variable costs Contribution margin Fixed costs Operating income $ 20,000 (a) Compute the break-even point in dollars and the margin of safety ratio for each company. (b) Compute the degree of operating leverage for each company. (c) Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (d) Assuming that sales revenue increases by 20%, calculate the operating incomes of the two companies without preparing income statement. (Use DOL)

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A B C D ABC Comfony Frued Costs A Break enen pot nt Dollars C... View the full answer