Answers
| 1 | ||
| Degree of Operating Leverage | ||
| Traditional Yarns | 1.56 | =78000/50000 |
| Auto-Yarns | 4.84 | =242000/50000 |
| 2 | ||
| % Change in Net income | ||
| Sales decrease by 10% | ||
| Traditional Yarns | -15.60% | =10%*1.56 |
| Auto-Yarns | -48.40% | =10%*4.84 |
| Sales increase by 7% | ||
| Traditional Yarns | 10.92% | =7%*1.56 |
| Auto-Yarns | 33.88% | =7%*4.84 |
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