Company A and B both have sales of $1,200,000 (20,000 units at a price of $60 each). Company A has variable costs of $30 per unit, fixed costs totaling $400,000, and interest of $50,000. Company B has variable costs of $20 per unit, fixed costs totaling $600,000, and interest of $25,000. Which company has the greatest degree of combined leverage?
