Question: Varner Inc. and King Inc. have the following operating data: a. Compute the operating leverage for Varner Inc. and King Inc.b. How much would income

Varner Inc. and King Inc. have the following operating data:

a. Compute the operating leverage for Varner Inc. and King Inc.b. How much would income from operations increase for each company if the sales of each increased by 20%?c. Why is there a difference in the increase in income from operations for the two companies?Explain.

Varner King Sales Variable costs Contribution margin Fixed costs Income from operations $600,000 360,000 $240,000 $300,000 120,000 $180,000 120,000 80,000 $ 60,000 $160,000

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