Reference no: EM132638481

The following CVP income statements are available for Oldham Company and Newton Company:

                                       Oldham Company                   Newton Company

Sales revenue                           $385,000                          $385,000

Variable costs                              192,500                            77,000

Contribution margin                       192,500                           308,000

Fixed costs                                  142,500                             258,000

Operating income                            $50,000                             $50,000

Question 1: Calculate the break-even point in dollars and the margin of safety ratio for each company. (Round break-even point to the nearest whole dollar, e.g. 5,275 and margin of safety ratio to 2 decimal places, e.g. 15.25%.)

Question 2: Calculate the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 15.25.)