The cumulative capabilities model radically differs from the strategic trade-off model because a. The strategic tradeoff model does not consider asset specificity which is central to the cumulative capabilities model. b. The cumulative model does not consider disruptive innovators. c. The cumulative capabilities model requires a company to focus on only one competitive priority at a time while the competing priority model requires companies to simultaneously address all priorities. d. Quality is the foundation of the cumulative capabilities model while it is one of several competing priorities in the strategic trade-off model.

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.