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Alabama Corporation and California Corporation have the same sales and profits as follows:
Alabama California
Sales $1,000,000 $1,000,000
Variable Costs 600,000 400,000
Contribution Margin 400,000 600,000
Fixed Costs 200,000 400,000
Profit 200,000 200,000
Using an operating leverage analysis, determine how much profits would increase for each company if each experienced a 10% increase in sales.
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