Reference no: EM131212875
The following CVP income statements are available for Chantal Corp. and Mantle, Inc.
Chantal Corp. Mantle, Inc.
Sales revenue $700,000 $700,000
Variable costs 350,000 210,000
Contribution margin 350,000 490,000
Fixed costs 175,000 315,000
Net income $175,000 $175,000
Instructions
(a) Compute the degree of operating leverage for each company.
(b) Assume that sales revenue decreases by 20%. Prepare a CVP income statement for each company.
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