Bernard Windows is a small company that installs windows. Its cost structure is as follows:

Bernard is considering changing its sales compensation for next year. Bernard would pay salespeople a 5% commission next year and reduce fixed selling costs by $62,500.
Calculate the degree of operating leverage at sales of 2,500 units under the two options. Comment briefly on the result.

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500 $ 400 Selling price from each window installation Variable cost of each window installation $ Annual fixed costs Number of window units sold $150,000 2,500