## Answers

1 | |||

Contribution margin | 82200 | ||

Divide by Net operating income | 65200 | ||

Degree of operating leverage | 1.26 | ||

2 | |||

Increase in sales | 12% | ||

X Degree of operating leverage | 1.26 | ||

Net operating income increases by | 15.12% | ||

3 | |||

Amount | Percent of Sales | ||

Sales | 153440 | 100% | =137000*1.12 |

Variable expenses | 61376 | 40% | =153440*40% |

Contribution margin | 92064 | 60% | |

Fixed expenses | 17000 | ||

Net operating income | 75064 |

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