Calculate the degree of operating leverage for both

Question

Income statements for two different companies in the same industry are as follows:

Sales                                                  $ 500,000              $ 500,000

Less: Variable Costs                             400,000                  200,000

Contribution Margin                               100,000                 300,000

Less: Fixed Costs                                    50,000                 250,000

Operating Income                                 $ 50,000                $ 50,000

1. Calculate the degree of operating leverage for both companies.

2. Calculate the break-even point in $ for each company. Which company has the higher break-even point? Why?