Income Statements for Two Different Wineries Are as Follows A $\quad$

Essay

Income statements for two different wineries are as follows: $\begin{array}{lrr}&\text { White Wine } & \text { Red Wine } \\&\text { Company } & \text { Company }\\\hline\text { Sales } & \$ 400,000 & \$ 400,000 \\\text { Less: Variable costs } & 300,000 & 200,000 \\\text { Contribution margin } & \$ 100,000 & \$ 200,000 \\\text { Less: Fixed costs } & 50,000 & 150,000 \\\text { Onerating income } & \$ 50,000 & \$ 50,000\end{array}$ A. $\quad$ Calculate the degree of operating leverage for each firm.
B. $\quad$ Calculate the margin of safety in doll ars for each firm.
C. $\quad$ Determine the operating income for each firm if sales increase by $20 \%$ .