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An investment banker is analyzing two companies that specialize in the production and sale of...

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Accounting

An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Blossom Yams uses a labor-intensive approach, and Crane Yams uses a mechanized system. CVP income statements for the two companies are shown below. Sales Variable costs Contribution margin Fixed costs Net income (a1) Blossom Yams $394,000 Blossom Yams 328,000 Crane Yams 66,000 16,000 $50,000 Crane Yams $394,000 156,000 238,000 The investment banker is interested in acquiring one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability. 188,000 $50,000 Calculate each company's degree of operating leverage. (Round answers to 2 decimal places, e.g. 1.15.) Degree of Operating Leverage Ih
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belows company's coststructure might have cenils protitability (a1) Calcalote each company desrre of ogerating leverage (Kound answers to 2 decimal places, e.x. 1.15)

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